(The Center Square) – A $10,000 one-time infusion into a property tax relief program for veterans and seniors won’t keep it from going broke, the state comptroller told lawmakers on Wednesday.
The $41 million fund gives a tax break on the first $32,000 of assessed property for low-income, disabled and senior Tennesseans, according to Comptroller Samuel Mumpower. Veterans receive a break on $175,000, but there are no income limits.
The program has a set funding limit of $41 million but has been short of that amount in the past two fiscal years, Mumpower told the Senate Finance, Ways and Means Committee on Tuesday. In fiscal year 2025, $44 million was needed, and in fiscal year 2026, $48 million, he said. The shortfalls were paid with reserves that are depleting.
Gov. Bill Lee added the one-time $10 million for fiscal year 2027 but that won’t solve future years, according to Mumpower.
“Under the program’s current eligibility criteria, we will continue to project shortfalls in the program as soon as 2028,” Mumpower said.
The program gives tax relief to 111,918 Tennesseans. Seventy percent of the recipients are elderly, disabled, or considered low-income, but they use only $13 million, or 30% of the funds, Mumpower told the committee. Veterans and their surviving spouses make up 30% of recipients but account for 70% of funding.
“The income limits for the low-income and elderly program are so low that I literally believe that the elderly population is going to die out of the program eventually,” Mumpower said.
Tuesday was not the first time Mumpower warned the committee about the program’s funding shortage. Sen. Jack Jackson, R-Franklin, presented the same three options as he did in a 2025 committee meeting.
One option is to allocate more money, lawmakers said. If lawmakers chose to do nothing, the comptroller’s office would prorate the program, reducing the amount of benefits. Homeowners would have to pay their property taxes up front and be reimbursed, which would be an “absolute nightmare,” Jackson said.
The third option is to reduce the benefits. Sen. Bo Watson, R-Hixson, chairman of the Finance Committee, introduced a bill in January that would raise the veterans’ reimbursement amount from $175,000 to $200,000. Rep. Yusuf Hakeem, D-Chattanooga, is sponsoring the bill in the House.
Sen. Dawn White, R-Murfreesboro, and Rep. Debra Moody, R-Covington, sponsored a bill in 2025 that would raise the cap to $250,000. That bill is still pending.
