NASHVILLE – Higher than expected business tax collections in December pushed Tennessee revenues past budgeted projections. Finance and Administration commissioner Mark Emkes reported today that state revenue collections for December were $965.7 million, or 16.54% above December 2010. December collections posted the eighth consecutive month in which the growth rate has been 5.0% or higher.
“While it’s encouraging to see an improvement in business profits, the unexpected overcollection in December could be a timing issue, and as a result future months could be negatively impacted,” Emkes said. “Typically, about one-fourth of all franchise and excise tax collections are realized in the month of April, so we’ll continue to closely monitor our spending for the balance of this year.
“We’re very pleased with December sales tax collections, which reflect renewed consumer confidence in our economy. It’s important to remember, though, that we’re still not back to pre-2008 collection levels on sales taxes.”
On an accrual basis, December is the fifth month in the 2011-2012 fiscal year.
December collections were $123.2 million more than the budgeted estimate. The general fund was over collected by $118.9 million and the four other funds were over collected by $4.3 million.
Sales tax collections were $12.9 million more than the estimate for December. The December growth rate was 6.78%. For five months revenues are over collected by $56.3 million, and the year-to-date growth rate is 6.29%.
Franchise and excise taxes combined were $114.5 million above the budgeted estimate of $142.8 million. For five months revenues are over collected by $143.4 million.
Gasoline and motor fuel collections for December increased by 7.65%, and they were $3.2 million above the budgeted estimate of $64.6 million. For five months revenues are under collected by $3.0 million.
Tobacco tax collections were $1.1 million below the budgeted estimate of $24.6 million, and for five months they are $6.4 million below the budgeted estimate.
Inheritance and estate taxes were under collected by $6.0 million for the month. For five months collections are $5.6 million above the budgeted estimate.
All other taxes were under collected by a net of $300,000.
Year-to-date collections for five months were $194.2 million more than the budgeted estimate. The general fund was over collected by $188.4 million and the four other funds were over collected by $5.8 million.
The budgeted revenue estimates for 2011-2012 are based on the State Funding Board’s consensus recommendation of April 15, 2011 and adopted by the first session of the 107th General Assembly in May. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.
The State Funding Board met on December 9th and 14th to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2011-2012. The revised ranges assume an over collection from the July 2011 budgeted estimate in the amount of $187.8 million to $220.5 million in total taxes and in the amount of $177.0 million to $209.6 million in general fund taxes for the current fiscal year.