TN SB2200

Counties and municipalities experiencing population-based funding reductions will have cuts phased in incrementally over five years rather than implemented all at once.

First year of population loss limits the funding reduction to 20% of the total projected loss, with an additional 20% applied each subsequent year until fully aligned with certified population.

Department of Revenue must apply a mitigation factor ensuring no local government loses more than 20% of its total annual population-based revenue in the first year of decline.

If a jurisdiction's population increases during the phase-in period, the department must recalculate the base loss and adjust the transition accordingly.

Effective date: July 1, 2026.