Friday, July 10, 2009

Tennessee June Revenues

NASHVILLE - State tax revenues continued to decline in June for the eleventh consecutive month of the fiscal year, Finance and Administration Commissioner Dave Goetz announced today. Tennessee sales tax collections have experienced negative growth for 16 of the past 18 months, when compared to the year before.

“Governor Bredesen and the Legislature worked together to map a multi-year path to preserve budget stability, so we are positioned to weather the economic downturn,” Goetz said.   “By maintaining healthy cash reserves while reducing spending we are able to keep the state’s budget balanced, but we need to continue to make sure our spending is in line with collections ongoing.” 

Overall June revenues were $1.088 billion, which is $134.8 million less than the state budgeted.

On an accrual basis, June is the eleventh month in the 2008-2009 fiscal year.

The general fund was under collected by $127.6 million, and the four other funds were under collected by $7.2 million.

Sales tax collections were $68.3 million less than the estimate for June.  The June growth rate was negative 9.41 percent. For eleven months revenues are under collected by $606.6 million. The year-to-date growth rate for eleven months was negative 7.35 percent.

Franchise and excise taxes combined were $41.6 million below the budgeted estimate of $279.2 million. The growth rate for June was negative 14.28 percent.  For eleven months revenues are under collected by $322.5 million and the year-to-date growth rate was negative 19.37 percent.

Privilege tax collections were $5.2 million below the June estimate. For eleven months collections are $56.9 million below the budgeted estimate.

Business tax collections were $12.8 million less than the June estimate, and the growth rate was negative five percent. Year-to-date collections for eleven months are $9.6 million below the budgeted estimate.

Inheritance and estate tax collections were $1.4 million below the June estimate. For eleven months collections are $12.3 million below the budgeted estimate.

Tobacco tax collections were $123,000 above the budgeted estimate of $31.8 million. For eleven months revenues are under collected by $24.3 million.

Gasoline and motor fuel collections for June increased by 1.35 percent. For eleven months revenues are under collected by $43.5 million.

Year-to-date collections for eleven months were $1.146 billion less than the budgeted estimate. The general fund was under collected by $1.047 billion and the four other funds were under collected by $99.0 million.

The budgeted revenue estimates are based on the State Funding Board’s consensus recommendation adopted by the second session of the 105th General Assembly in May of 2008.

The revised estimates for this fiscal year as presented in the 2009-2010 Budget Document assume an under collection in total taxes in the amount of $1.10 billion. The general fund under collection is projected to be $1.06 billion.

By tax source the under collections are: Sales tax $544.2 million; F&E taxes $336.1 million; privilege taxes $80.6 million; hall income tax $58.0 million; highway fund road user taxes $48.6 million; and a net under collection of $40.0 million from all other tax sources.

On May 7, 2009 the State Funding Board met and adopted revised revenue growth ranges for the current fiscal year ranging from negative 9.00 percent to negative 8.50 percent for total taxes, and negative 10.20 percent to negative 9.70 percent in general fund taxes.

These revised ranges recognize a revenue shortfall in total taxes from the original budgeted estimates in the amount of $1.280 billion at the low end of the range to $1.224 billion at the high end. The ranges for the general fund recognize a shortfall of $1.222 billion at the low end to $1.176 billion at the high end.

 

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