Tennessee Has a $1.2 Billion Budget Surplus - Every Penny Should Be Invested in Public Schools

More than a decade of neglect by state’s GOP leadership has left Tennessee last in the nation in investment in schools - it’s time to change that

Photo by Jakub Żerdzicki on Unsplash

Tennessee’s latest revenue numbers are out and they include a wrap-up of the 2025-26 fiscal year.

The key takeaway: The state collected $1.2 billion more than the budgeted estimate. This means state lawmakers and the new Governor will have a big surplus to consider as they start planning the 2027-28 budget.

Here’s a wild and crazy idea: Invest every single penny into public education.

Why is Tennessee Last in the Nation in School Funding?

After all, with the GOP in charge of all of TN government since 2011, the state is now last in the nation in investment in schools - $1.9 billion below our neighbors in Mississippi.

This means schools and the students in them are not provided the needed resources to achieve success.

And, there’s at least one area where the evidence suggests years of neglect are taking their toll: teacher retention.

Tennessee has the highest rate of teacher turnover in the nation.

Tennessee, Ranked Dead Last in School Funding, is First in Teacher Loss

Now, a report on year-over-year teacher turnover shows Tennessee leads the nation in teacher loss.

Tennessee classrooms are losing teachers at a higher rate than any other state in the nation, according to a new report from the National Education Association.

The report found Tennessee saw the largest percentage decline in its teacher workforce between the 2023-24 and 2024-25 school years, losing 10.36% of its educators during that period, or more than 7,400 teachers.

The funding reality is that schools in our state are worse off than they were just a few years ago:

A recent story about Tennessee school funding notes not only is the state dead last in the nation in school funding, but also, the state’s investment in schools has dropped by 10% since the 2023-24 school year.

And teachers are feeling the pain:

After adjusting for inflation, Tennessee teacher pay has fallen 6.5% over the last decade — meaning teachers are being paid less today in real dollars than they were 10 years ago.

Meanwhile, the state’s school voucher scheme is slated to cost $300 million and millions more is going to a vendor that administers the program.

This diversion of public funds provides private school discount coupons to families with children already attending private schools - with estimates suggesting 70% or more of voucher recipients were already enrolled in a private school before receiving the voucher.

And, vouchers are largely going to higher income families, Chalkbeat reports.

The majority of Tennessee’s new vouchers for the upcoming school year were awarded to higher-income families, despite new income rankings meant to prioritize lower-income families.

The majority of the new vouchers – 9,360 – went to students in the Priority 3 category, where a family of four could earn up to $173,160 and still qualify to receive a voucher, which is valued at more than $7,500 for the upcoming school year.

So, in addition to using the state’s surplus on public schools, Tennessee should suspend (with a goal of ending) its school voucher scheme.

This would leave $1.5 billion available to invest in public education.

I’d suggest the following:

$500 million to provide every public school teacher a 10% raise. This would boost the minimum starting pay to $55,000 and would provide a financial incentive for those considering leaving teaching to stay in the field.

$500 million for districts to use to address targeted needs - including possible Pre-K expansion and support for other programs to enhance programmatic offerings.

$500 million in additional capital funds - a 2024 Comptroller’s report found $9.8 billion in infrastructure needs across all Tennessee districts between now and 2030.

Of course, we’ve been here before - our state has had big budget surpluses in the past and squandered the opportunity to make bold investments in schools:

Tennessee Has a $3Billion Surplus

Back in 2021, I noted:

Still, I’ve yet to hear anyone in the state’s legislative leadership call for bold, new investments in public schools. Yes, a bipartisan group of policymakers has suggested that our school funding formula - the BEP - needs $1.7 billion just to be adequate. Still, Gov. Bill Lee has not come out and mentioned that he’ll be proposing using these surplus dollars to fund schools.

Back then, an analysis by the state’s own experts suggested we needed $1.7 billion in new money to properly fund schools. Now, we need nearly $2 billion to even be on par with Mississippi.

While Advocates Push for School Funding, Tennessee Sits on Multi-Billion Dollar Surplus