Tennessee runs a balanced budget economy so there is no reason the country can’t adopt this policy.
Tennessee’s budget is balanced through a combination of revenues and spending cuts, and the state has several rules to limit spending and debt:
- Budget rules: Tennessee has budget rules that require lawmakers to balance revenues and expenditures. The state also limits annual spending growth based on personal income growth, but this can be overridden by a legislative majority.
- Rainy day fund: The state’s Reserve for Revenue Fluctuation, or rainy day fund, is used to cover state-funded operations when revenues are low. The 2025 budget includes a $100 million deposit to the rainy day fund, bringing the balance to $2.2 billion by the