Gov.-elect Marsha Blackburn said a review of state spending – a “Tennessee-style DOGE” operation modeled after the Trump administration’s Department of Government Efficiency led by Elon Musk – is among her first priorities. State legislators supported re-evaluation of state spending but urged thoughtfulness during The Sycamore Institute’s annual summit Friday.
“Every dollar is a taxpayer dollar, and the legislators really want to work with me on this so that we’re eliminating positions that are not filled, programs that have outlived their usefulness, reviewing contracting, holding nonprofits accountable for the taxpayer money that they get,” Blackburn said following her gubernatorial victory.
The state’s budget season began Monday with economic forecast presentations to the State Funding Board. This year, Tennessee faces hundreds of millions of dollars in additional costs due to federal budget changes, in addition to a $58 billion highway project backlog and projected declines in the lottery proceeds that fund college scholarships.
Sen. John Stevens, a Huntingdon Republican and vice chair of the Senate Finance, Ways and Means Committee, said Friday that he is “always an advocate” for re-evaluating practices and looking for efficiencies. “Even if it isn’t a lot of money (saved) … we better be sure that what we’re taking your money and spending it on is efficient and it’s meeting your needs,” he said.
Stevens pointed to the TennCare Bureau’s document review function as an example for potential areas of technological advancement. “Can AI read those documents and categorize them and submit a recommendation to a person that can then approve it or not approve it?” he said during a panel discussion. “Just, instead of a whole bunch of people doing it, fewer people doing it.”
Senate Minority Leader Raumesh Akbari, a Memphis Democrat, urged thoughtfulness in replacing human-run systems with technology. “What does that do for a small town where the majority of the people work at that one government office?” Akbari said. “So it has to be smart, and it has to be balanced.” Akbari said most state departments have been asked to submit downsized budgets each year since Gov. Bill Haslam’s administration.
“Gov.-elect Blackburn has a real opportunity here,” Akbari said. “I don’t think that you can any longer say … ‘We’re cleaning up what Democrats did when they were in charge.’ This is a continuation of a party that’s been in charge for 16 years. So how can we all work together to make the experience better for Tennesseans?”
Peter Muller, senior officer specializing in financial risk management at The Pew Charitable Trusts, said some states are exploring ways to use AI to increase efficiency, but noted that efficiency can also mean increasing accuracy rather than decreasing cost. States will be required to pay a share of their Supplemental Nutrition Assistance Program benefit costs for the first time this year as part of the One Big Beautiful Bill Act.
States that exceed the 6% goal error rate set by Congress will be financially penalized starting in October 2027. Depending on its error rate for the 2026 fiscal year, Tennessee may have to pay between $162 million to $171 million for the program, in addition to an increased share of program administrative costs.
“The way the matching funds are set up, the more accurate your SNAP determinations or SNAP payments are, the lower your state’s matching rate is going to be,” Muller said. “We’ve seen a lot of states really heavily investing in the administration of their SNAP programs to try and really bring that error rate down because they see that as a way to save money over the long term,” he said.
