Gov. Lee Delivers 2026 State of the State Address

NASHVILLE, Tenn. - Today, Tennessee Governor Bill Lee delivered his eighth and final State of the State address and presented budget and legislative priorities for the upcoming year to a joint session of the General Assembly and fellow Tennesseans.

Key highlights are noted below, and the full speech as prepared for delivery can be found here. A Fiscal Year 2026-27 budget overview can be found here.

Our state's legacy of responsible fiscal stewardship places Tennessee in a strong budgetary position and allows for investments to secure continued success. Lee's proposed $57.9 billion budget includes strategic funding to ensure economic and educational opportunity, strengthen families, preserve our natural resources, and more.

Economic Opportunity + Tax Relief

• $20 million investment in Tennessee's Rainy Day Fund, bringing Tennessee reserves to more than $2.2 billion, the largest in state history
• $8 million to expand the Tennessee Youth Employment Program, creating more opportunity for young adults to gain valuable job skills, especially in underserved communities
• $25 million in further investment in the Tennessee Entertainment Commission to fund incentive grants for Tennessee's music and film industry

Infrastructure + Housing

• $425 million to the Tennessee Department of Transportation to address the state's infrastructure needs, including expediting existing road projects and funding new projects across rural and urban Tennessee
• $165 million to renovate and replace Tennessee's rest areas and welcome centers
• $56.2 million to support infrastructure needs for commercial and general aviation
• $30 million to create the Starter Home Revolving Loan Fund to support construction of new, affordable starter homes for hardworking Tennesseans, prioritizing rural communities
• $25 million further investment in the Rural Development Fund to improve quality of life in rural communities by supporting business development and infrastructure planning
• $1.5 million to bring more direct international flights to Tennessee

Education
Public Education Investments

• $339 million to strengthen education in Tennessee's public schools, including further investment in the Tennessee Investment in Student Achievement (TISA) formula funding, summer learning camps, and raising starting teacher pay to $50,000
• $20 million for K-12 facilities and maintenance grants at public schools across Tennessee
• $40 million to support facilities improvements at public charter schools
• $3 million to expand the school-based behavioral health liaison program, giving students across Tennessee schools important resources and mental health support

Expanding Choices for Tennessee Parents

• $155 million to deliver school choice to even more Tennessee families in the 2026-27 school year by doubling Education Freedom Scholarships, bringing the total number of scholarships in the program to 40,000
  

Higher Education

• $350 million to fund construction of a new College of Medicine Interdisciplinary Building at University of Tennessee Health Science Center in Memphis
• $71.7 million to support capital maintenance projects at Tennessee's higher education institutions
• $10 million further investment in the Governor's Investment in Vocational Education (GIVE) program to support nuclear workforce education, as recommended by the Nuclear Energy Advisory Council
• $3 million for Next-Gen Academies at Tennessee Tech University for nuclear and cyber technologies
• $39.4 million to fully fund the outcomes-based funding formula, which may be used for program improvements that assist higher education institutions in meeting outcomes including student progression, degree production, research and service, efficiency metrics, and other measures related to institutional mission
• $3.5 million for the Corrections Education Investment Initiative, offering programming and educational opportunities for incarcerated individuals and preparing them for reentry success

Strong + Healthy Families

• $205 million utilizing Shared Savings to strengthen healthcare initiatives, including funding Rural Health Transformation Resiliency Grants
• $230 million to TennCare to cover increasing costs associated with medical inflation, including higher prescription drug prices and Medicare payments, and increased utilization and services
• $34.5 million to Department of Children's Services (DCS) to assist with reducing caseload ratios
• $10.7 million to enhance staff safety at DCS facilities that accommodate delinquent youth
• $15 million for capital project and maintenance grants to YMCAs across Tennessee
• $24.2 million to continue a Department of Health Dental Pilot Program to address unmet dental service needs and increase the number of dentists in Tennessee
• $1 million non-recurring grant to non-profit partner Live Like Lou Foundation for ALS research
• $500k recurring grant to non-profit partner The Next Door to assist women in recovery from substance use
• $500k recurring grant to non-profit partner The Jason Foundation, which provides educational and awareness programs related to youth suicide
• $250k recurring grant to non-profit partner Families Free, which provides treatment, education, and intervention services to families

Safe Neighborhoods

• $100 million to bolster the Governor's Response and Recovery Fund which provides support to individuals, businesses, and communities after natural disasters
• $80 million for public safety grants to enhance crime prevention and increase public safety in Memphis
• $83 million to Tennessee Department of the Military for construction of a new Army Aviation Support Facility in Rutherford County
• $37.5 million for salary increases and creation of an additional 50 State Troopers and related support staff positions to improve public safety across the state
• $20 million for capital improvements at the West Tennessee and East Tennessee Regional Juvenile Justice Centers
• $1.7 million recurring grants to non-profit partners that combat human trafficking and support survivors
• $1 million recurring grant to non-profit partner Men of Valor, which provides faith-based reentry support for incarcerated individuals
• $250k recurring grant to Lipscomb University's LIFE Program, which provides higher education opportunities for incarcerated individuals
• $500k recurring grant to non-profit partner Tennessee Prison Outreach Ministry, which provides faith-based reentry support for individuals and their families

Conservation

• $81.6 million to create three new Tennessee State Parks, creating a total of 14 new state parks under Gov. Lee's leadership, setting the Tennessee record for the most state parks created by one administration
• $1.6 million for the Subsurface Sewage Disposal Program, reducing waiting times for permitting services and oversight
• $1.1 million to support further enhancement of Tennessee's electric grid

Nuclear Energy + Innovation

• $50 million to continue Tennessee's efforts to lead the nation in adoption of artificial intelligence technology and make government work more efficiently for Tennesseans
• $25 million further investment in the Nuclear Energy Fund to attract advanced nuclear technology companies, ensuring Tennessee continues leading the nation as the epicenter of America's nuclear renaissance
• $20 million to complete the relocation of the North Data Center
• $20 million to accelerate Tennessee's quantum computing industry by attracting substantial federal and private-sector investment and to translate our scientific strengths into durable, high-wage job creation across advanced manufacturing, life sciences and logistics industries
• $2 million to aid in the expansion of agricultural technologies in rural communities