Deadline

In the event the governing body does not pass the budget by June 30, T.C.A. § 6-56-102 takes effect. It states:

If for any reason a budget ordinance is not adopted prior to the first day of the new fiscal year, the appropriations for the last fiscal year shall become the budget and appropriations of the new fiscal year for up to two months. During this period, departments and other entities receiving municipal appropriations generally may not encumber more during a month than the amount allotted for the comparable month of the prior fiscal year unless the governing body specifically authorizes the additional allotment by ordinance and identifies an equal funding source. If the governing body adopts a new budget during this period, the newly adopted budget replaces the continuing budget and becomes effective at that time. 

With approval from the Comptroller or the Comptroller's designee based on extraordinary circumstances and a request  for extension from the municipality before the 15th day of the second month, the continuing budget may be extended through a third month, but it cannot continue beyond the last day of that third month. The request must include justification for extending the continuing operating budget through the third month of the fiscal year. The Comptroller or the Comptroller's designee shall report the Comptroller's approval or disapproval to the municipality within seven (7) business days from the date on which the request was received or the date on which any requested supplemental information was received, whichever is later, at which time the municipal legislative body may take action to extend the continuing operating budget for the third month of the fiscal year.

While this provision exists, municipalities are strongly urged to meet the June 30 deadline. If a budget is not submitted to the Division of Local Government Finance within two (2) months of the beginning of the fiscal year, the local government may not issue debt or financing obligations. In the case of an emergency, the Comptroller's Division of Local Government Finance may waive the requirement of budget approval to allow the local government to enter into emergency financial transactions. T.C.A. § 9-21-104