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State Revenues for January $37M More than Expected

Press release from Department of Finance and Administration; Feb. 9, 2012:

NASHVILLE – Tennessee tax collections continued an upward trend in January, reflecting December consumer spending during the holiday buying season. Finance and Administration Commissioner Mark Emkes today announced that overall January revenues were $1.056 billion, which is $37.1 million more than the state budgeted. It’s the sixth consecutive month of positive growth this fiscal year, with sales tax collections once again contributing heavily to the upward trend.

“For nearly two years, we’ve seen growth in sales tax collections, with January being the 22nd consecutive month in which sales taxes have recorded positive growth,” Emkes said. “Holiday sales brought positive growth across Tennessee and the nation, indicating that the economy continues to slowly recover from the worst recession on record.

“Still, due to the uncertainty surrounding resolution of the federal budget, we’ll continue to monitor state spending and work closely with the legislature in order to end the fiscal year with a balanced budget as required by the state’s constitution.”

On an accrual basis, January is the sixth month in the 2011-2012 fiscal year.

The general fund was over collected by $25.9 million and the four other funds were over collected by $11.2 million.

Sales tax collections were $27.6 million more than the estimate for January. The January growth rate was positive 7.47%. For six months revenues are over collected by $84.0 million. The year-to-date growth rate for six months was positive 6.53%.

Franchise and excise taxes combined were $1.2 million above the budgeted estimate of $156.1 million. For six months revenues are over collected by $144.6 million.

Gasoline and motor fuel collections for January increased by 3.73% and were $3.4 million above the budgeted estimate of $69.3 million. For six months revenues are over collected by $0.4 million.

Tobacco tax collections were $2.4 million below the budgeted estimate of $21.6 million, and for six months they are $8.8 million under the budgeted estimate.

Inheritance and estate taxes were over collected by $2.9 million for the month. Year to date collections for six months are $8.5 million more than the budgeted estimate.

Privilege tax collections were $2.7 million more than the January estimate, but on a year to date basis, August through January, collections are $4.3 million below the estimate.

All other taxes were over collected by a net of $1.7 million.

Year-to-date collections for six months were $231.3 million more than the budgeted estimate. The general fund was over collected by $214.2 million and the four other funds were over collected by $17.1 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.shtml.

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 of $187.8 million to $220.5 million in total taxes and $177.0 million to $209.6 million in general fund taxes from the fiscal year 2012 budgeted estimate.

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