On Tuesday, January 13, the state’s legislative branch reconvened for the second session of the 114th General Assembly. With most legislators returning and several major policy debates unresolved from last year, lawmakers are expected to proceed at a brisk pace as the 2026 election cycle approaches.
The membership of the General Assembly remains largely unchanged, with the exception of the late Rep. Jeff Burkhart of Clarksville, who unexpectedly passed away in November 2025. Rep. Michael Lankford has since been appointed by the Montgomery County Commission to fill the vacancy.
2026-2027 Fiscal Year Budget Outlook
As required by the Tennessee Constitution, budget deliberations will take center stage early in the session. For FY 2025-26, lawmakers enacted a $59.8 billion budget, representing a modest 1.6% increase from the previous year’s budget. However, the state’s most recent spending plan reflected minimal growth, and current revenue projections suggest limited flexibility going forward. While nominal revenue increases are anticipated over the next two fiscal years, inflationary pressures and population growth are expected to absorb much of that growth. This will leave lawmakers with the challenge of covering high baseline costs in order to sustain current services, and the FY 2026-27 budget will likely need upwards of $700 million or more to do so. Governor Lee’s proposed budget, expected in early February, will be closely watched to determine whether the state will identify funding to maintain these services or implement cuts to reduce spending.
House Bill Limits in Action
In addition to fiscal constraints, the House has instituted a 10-bill filing limit for most Representatives, with committee leadership allowed to file two to five additional bills germane to the subject matter of their respective committees. This limit does not include bills remaining from the 2025 session. These limits, combined with the proximity of the August primary elections, are expected to contribute to a faster-moving session. Each legislative day restricts incumbent members’ ability to campaign or fundraise, placing a premium on efficiency and narrowing the scope of issues likely to advance.
Returning Education Issue on the Horizon
Since the Education Freedom Scholarship Program, a major win for the Lee administration to create school scholarships, passed during the 2025 Special Session, 40,000 families have applied for the program, with just 20,000 available seats. State lawmakers will consider expanding the program in light of a provision in the law that allows the legislature to add 5,000 students to the program if the number of applications reaches 75% of the number of scholarships available. While the current cost of the program is approximately $144 million dollars per year, House leadership has indicated a desire to at least double the program this session.
Tennessee Growth Affecting Policy
Continued population growth has accelerated the need to ensure sufficient infrastructure – including utilities, energy, roads, and solid waste management – for residents and businesses. At the top of the administration’s list for stable domestic energy production is investment in nuclear energy.
Increased growth has intensified the need for long-term solutions to solid waste management, as approximately 40% of the state’s landfills have 10 years or less remaining capacity. A complex and duplicative regulatory process and low recycling rates drive the need for comprehensive modernization. While the advisory task force on solid waste, established by law last year, continues to seek information and input for long-term policy reform, stakeholders are working together to find solutions for the more time-sensitive components.
Also accelerated by rapid growth is the need for more road and bridge project funding. While a proposal to index the current gas tax for inflation is anticipated, its success is less than certain in a year that finds the cost of goods and services up and elections around the corner.
Potential for Tort Reform Changes
The state’s business community and local governments are closely watching efforts by some lawmakers to increase tort limits available to injured parties seeking damages via litigation. Last year, a bill failed that sought to increase monetary damages available under the Governmental Tort Liability Act. A similar bill aimed at increasing the cap on non-economic damages in personal injury actions stalled out late in the session. Opponents of both bills widely expect the sponsor of those efforts to make a second attempt during the upcoming session and will be watching with a keen eye.
Immigration Policy Preview
Republican leaders have indicated plans for a slate of immigration-related bills aimed at strengthening enforcement and aligning state law with federal priorities. Proposals anticipated include measures to tighten eligibility for both state driver’s licenses and professional credentials to require legal status, bolster cooperation with federal immigration authorities, and enhance penalties related to immigration enforcement. Lawmakers are also considering requirements for law enforcement reporting of interactions with undocumented immigrants and proposals to limit federal enforcement activities on school and religious property. Given the breadth of these initiatives and potential impacts on residents and local governments, these policies could have significant effects on state compliance requirements and local operations.
New Funding for Rural Health
The One Big Beautiful Bill Act, passed by Congress in July 2025, created a Rural Health Transformation Program providing $50 billion over five years to state governments to improve healthcare access in rural communities. Half of the dedicated funds are to be split among states equally, and the remaining half will be distributed according to a formula based on rural population size, planned spending, and healthcare needs. Tennessee is set to receive $206.8 million for FY 2026-27, aimed at strengthening rural healthcare by modernizing systems, expanding access to preventative and maternal care, and investing in technology that improves coordination and efficiency. It also prioritizes community wellness and workforce development to ensure rural providers are equipped to deliver high-quality care now and in the future.
State lawmakers are sure to have an opinion on how these funds should be used and are also likely to take up perennial issues such as the state’s Certificate of Need Program, expanding the scope of practice of certain medical professionals, and improvements to the Supplemental Nutrition Assistance Program.
Retirements Already Announced
With the 2026 election year underway, several members have already announced plans to retire when the session concludes. Among those are Caleb Hemmer of Nashville; 25-year member Johnny Shaw of Boliver; Mary Littleton of Dickson; Monty Fritts of Kingston, who is running for governor; Johnny Garrett of Goodlettsville, who is running for Congress in the 6th Congressional District; Jerome Moon of Maryville, who is running for Blount County Mayor; and Ron Travis of Dayton, who is running for Rhea County Mayor.
Filing Deadlines and Key Dates
The bill filing deadline for the Senate is anticipated to be January 29, 2026, while the House is expected to set a deadline of January 30, 2026.
All eyes will then turn to Governor Lee for his final State of the State address, currently scheduled for February 2, 2026. During that address, the governor will address a joint session of the General Assembly and announce his legislative priorities for his last year in office.
March 10 will be a key date for incumbent lawmakers, as candidate petitions are due by noon that day, and primary challengers for the August election will become clear.
If you have any questions about the 114th General Assembly, please contact the authors. The authors wish to thank Mary Martha Willson for her contributions to this content.