The Tennessee Department of Finance and Administration told the House Finance, Ways and Means Committee on Oct. 28, 2025, that CARES Act and American Rescue Plan Act funding stabilized state services during the COVID-19 crisis and later was redirected to long‑term infrastructure, education and health projects.

The overview presented by Deputy Commissioner Eugene Neubert and State Budget Director David Thurman laid out the two‑phase use of federal relief: quick relief delivered through CARES Act dollars, and longer‑term capacity building with ARPA funding. "We've seen a global pandemic. We've had economic uncertainty," Neubert said during the department's opening remarks as he described the state's approach.

Why it matters: The state's stewardship of federal relief influences whether Tennessee keeps tens or hundreds of millions of dollars authorized by Congress. Committee members pressed F&A staff about projects that had incurred little or no expenditures yet and asked what fallback plans exist if funding cannot be fully drawn before federal deadlines.

Key facts and figures from the presentation
- CARES Act: F&A reported about $2.3 billion delivered to counties, small business grants (about $350 million to nearly 29,000 employers), broadband expansion ($51 million to connect about 55,000 residents), education and hospital supports. Deputy Commissioner Neubert described CARES as largely spent by 2021.
- ARPA: The state shifted to long‑term projects totaling about $3.7 billion, with major line items including roughly $1.3 billion for water and sewer projects (about 1,200 projects), $500 million for broadband/digital government expansion and about $950 million for health and behavioral health systems statewide.
- Spending status and risk: Committee members observed that as of early September 2025 only a portion of ARPA appropriations had posted expenditures; TDOT mega‑site road improvements and a Knox County forensic center were cited as projects showing no recorded expenditures in the state's dashboard. Neubert said TDOT expects expenditures to be billed late this calendar year or early 2026 and Knox County expects to submit bills in early to mid‑2026. He added that F&A is identifying “Plan B” fallback uses that meet federal eligibility so dollars aren’t lost.

How ARPA oversight is handled
- The Financial Stimulus Accountability Group (FSAG), chaired by the governor's office, monitors ARPA allocations and receives quarterly reports. F&A told the committee it will increase frequency of FSAG reporting to better track final‑year spending and will notify FSAG and legislative leaders if projects appear unable to meet deadlines.

State revenue and budget posture
- Budget Director David Thurman outlined how Tennessee used unusually strong recurring revenues in recent years partly driven by taxing online sales, and how the state intentionally used recurring money for nonrecurring investments (transportation, capital, pension/OPEB) to preserve flexibility. Thurman said Tennessee’s rainy day fund was above 9 percent and the state has maintained high bond ratings.
- Looking to FY 2027: Thurman said the revenue outlook shows slower, more normal growth and cautioned that built‑in costs (TennCare federal match changes, contract inflators, employee benefits) could absorb much of any modest revenue growth.

Committee concerns and next steps
- Several members urged F&A to monitor at‑risk ARPA projects closely and be prepared to reallocate funds if grantees cannot bill in time. Neubert and Thurman said the department has eligible fallback uses identified and will work with FSAG to reprogram funds as needed.

Ending note: F&A framed the relief dollars as having moved Tennessee from crisis response to infrastructure investments, but both the department and committee members acknowledged a busy final year ahead to ensure federal ARPA funds are fully expended under federal timelines.