Tennessee Panel Urges Medicaid Count for School Funding

NASHVILLE, Tenn. — Tennessee would count roughly 120,000 more students as economically disadvantaged, and send more money to the districts that teach them, under a change recommended this week by the committee that reviews the state school funding formula.

Members of the TISA Review Committee signed off Wednesday on the panel’s first yearly report, 13 in favor and none opposed, with the House budget director from the Office of Legislative Budget Analysis abstaining. The report goes to the governor and legislative leaders by Nov. 1, ahead of the 2027 session.

Its main recommendation is to add Medicaid eligibility to the data Tennessee uses to identify low-income children. Right now the state relies on direct certification through benefit programs such as SNAP and TANF. Under the Tennessee Investment in Student Achievement formula, each economically disadvantaged student brings a 25 percent weight on top of base funding, which worked out to $1,823.75 per student in the 2025-26 school year.

The committee estimated the full change would cost $233 million a year. The state would cover about $163 million and local governments about $69 million. One member, a Memphis charter school leader, told the panel lawmakers could phase the change in or adjust the weight rather than absorb the whole cost at once.

Advocates have argued for years that Tennessee undercounts poor students. An analysis presented to the committee in May found that in 2023-24 Tennessee flagged only about 28 percent of its public school enrollment as low income, compared with 51 percent in South Carolina and 52 percent in Indiana, both of which use Medicaid data. The same analysis warned that federal SNAP eligibility changes could shrink the count further starting in 2027. In Anderson County, the share would climb from 29 percent to 46 percent under the proposal.

The report also calls for more formula money for school buildings and student mental health, larger allocations for the smallest rural districts, and separate attention to special education prekindergarten, which the K-12 formula does not cover. On Thursday the package picked up support from state Sen. London Lamar of Memphis. Whether any of it becomes law depends on what lands in the next state budget.

Filed under: Memphis TN Education News