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Tue, Jul 22, 2014

State revenue in black for first time in two years

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NASHVILLE – Tennessee revenue collections improved in April with a net positive growth of 2.23% over April collections one year ago. Finance and Administration Commissioner Dave Goetz reported today that overall April revenues were $1.243 billion, which is $43.4 million more than the state budgeted.

“April is the first positive sales tax growth month in almost two years - since May of 2008,” Goetz said. “Sales tax collections started their downward spiral starting in January of that year and, beginning with the month of June, recorded an unprecedented 22 consecutive months of negative collections.”

On an accrual basis, April is the ninth month in the 2009-2010 fiscal year.

The general fund was over collected by $51.4 million, and the four other funds were under collected by $8.0 million.

Sales tax collections were $9.7 million more than the budgeted estimate for April. The April growth rate was positive 5.62%. For nine months revenues are under collected by $201.8 million. The year-to-date growth rate for nine months was negative 4.11%.

Franchise and excise taxes combined were $47.6 million above the budgeted estimate of $312.9 million. For nine months revenues are over collected by $63.4 million.

Hall Income tax collections for April were $13.8 million less than the budgeted estimate. For nine months collections are $14.2 million less than the budgeted estimate. The growth rate for the nine month period was negative 22.42%.

Inheritance and estate tax collections were $1.4 million below the April estimate. For nine months collections are $9.4 million under the budgeted estimate.

Gasoline and motor fuel collections for April decreased by 2.80%. For nine months revenues are negative 0.15%, and $16.5 million below the budgeted estimate of $620.0 million.

Tobacco tax collections were $2.6 million under the budgeted estimate of $24.4 million. For nine months revenues are under collected in the amount of $1.0 million.

All other taxes for April, including the tobacco tax, were over collected by a net of $3.9 million.

Year-to-date collections for nine months were $200.7 million less than the budgeted estimate. The general fund was under collected by $153.6 million and the four other funds were under collected by $47.1 million

The budgeted revenue estimates for 2009-2010 are based on the State Funding Board’s consensus recommendation adopted by the first session of the 106th General Assembly in May of 2009, and are available on the state’s Web site at http//www.tn.gov/finance/bud/budget.html.

The State Funding board met on December 18, 2009 and adopted mid-year revised revenue ranges for 2009-2010. The revised ranges reflect growth rates ranging from negative 1.50% to negative 0.25% in total taxes, and negative 2.35% to negative 0.85% in general fund taxes. Based on the consensus recommendation, the official budgeted estimates for 2009-2010 were revised in late December.

The revised estimates are reflected on pages A-70 and A-72 in the 2010-2011 Budget Document and assume an under collection in total taxes in the amount of $161.3 million, and an under collection of $153.2 million in the general fund.

The funding board met again in March of this year and adopted final revenue ranges for 2009-2010. The board’s consensus recommendation was to recognize lower growth rates than those adopted on December 18, 2009. The revised ranges reflect growth rates ranging from negative 1.77% to negative 1.29% for total taxes, and negative 2.31% to negative 1.78% in general fund taxes.

Based upon the funding board’s March recommendation the revised estimates for 2009-2010 now assume an under collection in total taxes in the amount of $258.9 million, and an under collection of $231.0 million in general fund taxes.
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