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Govt Spending

Community Voice

Disaster response and recovery fund

The final FY26-27 budget included $44.2 million to bolster Tennessee's Governor's Response and Recovery Fund — significantly reduced from the $100 million Governor Lee originally proposed, and including $3.7 million specifically for Hurricane Helene recovery. Federal disaster funding uncertainty adds urgency to how much the state should maintain in reserves for natural disasters.

How much should Tennessee invest in its disaster response and recovery reserve fund?

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Sources

Governor Bill Lee — https://www.tn.gov/governor/news/2026/4/23/gov--lee-marks-the-close-of-the-2026-legislative-session.html
$44.2 million to bolster the Governor's Response and Recovery Fund which provides support to individuals, businesses, and communities after natural disasters
Governor Bill Lee — https://www.tn.gov/governor/news/2026/2/2/gov-lee-delivers-2026-state-of-the-state-address.html
$100 million to bolster the Governor's Response and Recovery Fund which provides support to individuals, businesses, and communities after natural disasters
The Sycamore Institute — https://sycamoretn.org/understanding-tn-budget
Uncertainty Surrounding Federal Disaster Funding Looms Over State Budgets.
Positions on this issue  ·  liberal → conservative
  1. Fully fund the Governor's original $100M proposal and expand the fund to account for growing climate-related disasters.
  2. Increase the fund above $44.2M given federal funding uncertainty and recent disasters like Hurricane Helene.
  3. Maintain the enacted $44.2M level and reassess after reviewing federal disaster funding trends.
  4. Hold the disaster fund flat and require the state to pursue federal reimbursement before tapping state reserves.
  5. Reduce state disaster fund contributions and rely primarily on federal FEMA resources for disaster response.

State budget size, reserves, and fiscal restraint

Governor Lee’s final sessions produced a roughly $58 billion budget framed as returning to more typical growth after high-revenue years, with large Rainy Day reserves, claims of low-tax fiscal stewardship, some new fee ideas, and tighter recurring spending discipline emphasized by legislative leaders.

What fiscal approach should Tennessee take on the size of the state budget and reserves?

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Sources

Governor Bill Lee — https://www.tn.gov/governor/news/2026/4/23/gov--lee-marks-the-close-of-the-2026-legislative-session.html
Lee’s budget further reinforces Tennessee’s legacy of conservative fiscal stewardship by investing in the state’s Rainy Day fund, bringing reserves to the largest level in state history.
House Finance Chair Gary Hicks — https://tnhousegop.org/member-newsroom/2026/04/state-rep-ron-gants-capitol-report-april-17-2026
We can be proud that we have held the line on recurring expenditures, preserved Tennessee’s reputation as one of the lowest-taxed states in the nation and continued investing in our core priorities.
Bass, Berry & Sims — https://bassberry.com/news/2026-legislative-recap-114th-tennessee-general-assembly-second-session
The $58.3 billion budget was tighter than in previous years, leading to unique approaches to generating revenue, including the institution of a $10 fee on all money transferred by a licensed money transmitter...
Positions on this issue  ·  liberal → conservative
  1. Grow recurring programs substantially using reserves and new progressive revenue
  2. Spend more on services even if it means slower reserve growth or modest tax rises
  3. Balance targeted one-time investments with strong Rainy Day reserves
  4. Strictly limit recurring growth, maximize reserves, and keep Tennessee low-tax
  5. Cut recurring spending and taxes further while banking still-larger surpluses