Amid Federal Shutdown, Tennessee Weighs Impact of Potential School Funding Changes on Disadvantaged Students

Tennessee Lawmakers were hoping for clarity on the government shutdown and potential shifts to federal block grants on Wednesday.

Tennessee lawmakers pressed state education officials on Wednesday for clarity about how a prolonged federal government shutdown and potential shifts to federal block grants could affect school funding, staffing, and services for high-need students across the state. Block grants are federal funds allocated to states in a single lump sum, providing greater flexibility in how the funds are spent.

During a Wednesday meeting of the Federal Education Deregulation Cooperation Task Force, leaders from the Tennessee Department of Education (TDOE) and the Comptroller’s Office of Research and Education Accountability (OREA) reported that communication with federal partners has nearly halted since the shutdown began.

They also acknowledged that the state has received no detailed guidance about potential block grant proposals.

“We have very limited correspondence with the federal government right now,” TDOE officials told lawmakers. “The very limited staff still working is focused on making sure money continues flowing to states.”

Serving Vulnerable Student Groups

The uncertainty comes as Tennessee districts rely on federal funds to support some of the state’s most vulnerable student groups. According to TDOE, almost one-third of Tennessee students are economically disadvantaged, nine percent are English learners, and 15 percent are students with disabilities. Approximately 300 of the state’s 1,926 public schools qualify as Title I schools. These schools have higher poverty rates.

Federal dollars support positions for Title I, the Individuals with Disabilities Education Act (IDEA), and other critical programs, particularly in small and mid-sized districts, where the share of federally funded staff is the highest. IDEA programs provide federal funding to ensure students with disabilities receive specialized instruction, services, and supports that meet their individual learning needs.

OREA research analyst Allison Pams told lawmakers that across 142 districts, federally funded full-time equivalent positions account for almost 8 percent of all full-time employees. Small districts rely on these supports the most, at nearly ten percent, while medium districts average just over nine percent.

Memphis-Shelby County Schools reported that 14.2 percent of its positions are federally funded, and Metro Nashville Public Schools reported 8.2 percent.

Representative William Slater, R-Gallatin, asked how long teachers and non-certified staff could continue to receive pay if the shutdown is extended.

TDOE leaders responded that districts typically begin the fiscal year by using prior-year federal allocations and that the department would instruct them to do the same in this situation. They did not indicate how long those resources would last without federal action.

Questions about Block Grant Model

Lawmakers also questioned how a potential shift to a federal block grant model, which former President Donald Trump has publicly supported, would change Tennessee’s responsibilities and how much the state education department might need to grow.

State officials said the state could absorb the work with its current capacity as long as federal funding levels remain consistent.

“In general, if the federal government were to block-grant to the state, the funds would continue to support those student groups, and it would fit within the existing capacity of the agency,” a TDOE representative said.

Senate Education Committee Chair Dawn White, R-Murfreesboro, noted that lawmakers have heard for months that block grants are “coming.” She asked whether Tennessee would continue to operate all current federal programs if the switch to block grants occurs.

Sam Pearcy, a TDOE deputy commissioner, said he would expect the state to preserve services for disadvantaged students and students with disabilities.

“If allocations stay about the same from the federal government to the state level, then we will still get those dollars to the schools that best serve the kids,” Pearcy said.

Despite the ongoing uncertainty, House Education Committee Chair Mark White, R-Memphis, expressed confidence that Tennessee could operate effectively under any federal scenario.

“I am convinced as a state that we will be able to run this well, whatever the federal outcomes may be,” White said.