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Press Releases

State Reports 24th Consecutive Month of Positive Revenue Growth

Press release from the State of Tennessee; April 12, 2012:

NASHVILLE – Tennessee revenue collections continued to exceed budgeted expectations in March. Finance and Administration Commissioner Mark Emkes said today that overall March revenues were $916.1 million, which is $78.6 million more than the state budgeted.

“March sales tax collections, representing February spending, recorded the 24th consecutive month of positive growth,” Emkes said. “We believe this to be a clear indication of continued consumer optimism, and represents an upswing in the state’s economy.

“Year-to-date corporate tax collections are very encouraging. However, this item needs to be carefully followed because about one-fourth of all collections typically occur in the month of April and these numbers have been extremely volatile in the recent past.

“In addition, we need to monitor a number of national and global issues, including resolution of the federal budget and the Patient Protection and Affordable Care Act, escalating gas prices and potential for rising inflation as well as the European financial crises and turbulence in the Middle East. We’ll need to be extremely diligent for the remainder of this year in order to keep the budget in balance and financially posture ourselves for the future.”

On an accrual basis, March is the eighth month in the 2011-2012 fiscal year.

The general fund was over collected by $79.2 million and the four other funds were under collected by $600,000.

Sales tax collections were $34.6 million more than the estimate for March. The March growth rate was positive 7.58%. For eight months revenues are over collected by $140.5 million. The year-to-date growth rate for eight months was positive 7.06%.

Franchise and excise taxes combined were $50.2 million above the budgeted estimate of $141.8 million. For eight months revenues are over collected by $198.6 million. The year-to-date growth rate for eight months was positive 26.65%.

Gasoline and motor fuel collections for March increased by 5.30% but were $157,000 below the budgeted estimate. For eight months revenues are under collected by $3.7 million.

Tobacco taxes collections were $1.0 million under the budgeted estimate of $25.1 million. For eight months revenues are under collected in the amount of $12.0 million.

Inheritance and estate taxes were under collected by $4.2 million for the month. Year to date collections for eight months are $284,000 less than the budgeted estimate.

Privilege tax collections were $1.4 million more than the March estimate, but on a year to date basis, August through March, collections are $470,000 below the estimate.

All other taxes were under collected by a net of $2.2 million.

Year-to-date collections for eight months were $330.1 million more than the budgeted estimate. The general fund was over collected by $316.9 million and the four other funds were over collected by $13.2 million. The FY 2012 budget assumed an overcollection of $209.6 million in General Fund taxes. Therefore, the amount overcollected above and beyond what’s already in the budget is $107.3 million ($316.9 million minus $209.6 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 2011-2012 budgeted estimate.

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NewsTracker

Flooded Building Forces Funding Board to Temporarily Forgo New Revenue Forecasts

Officials who decide how much the state should expect to collect in tax revenue each year put off making those predictions today, citing this week’s closure of Tennessee Tower for delaying the numbers.

Tennessee Funding Board members adjourned after a nearly 30-minute meeting Thursday without choosing a future meeting date to discuss the revenue estimates which play a key part in writing each year’s state budget.

A spokesman for Comptroller Justin Wilson, who chaired the board, said closures at Tennessee Tower have delayed staff from hashing out the differences in revenue estimates pitched by economists earlier this month. Those staff members are then to report recommendations to their respective board member to help them decide a reasonable range.

But with Tennessee Tower — where those staffers are stationed — evacuated Tuesday and closed Wednesday and Thursday, officials have been unable to crank out the revenue estimates, spokesman Blake Fontenay said.

With the approaching holidays coming up next week, Fontenay said he is unsure whether the state funding board would attempt to meet again later this month or wait until the new year to decide on a revenue range.

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Press Releases

October Revenue Collections Up

State of Tennessee Press Release; Nov. 10, 2010:

NASHVILLE – State revenue collections for October were $732.8 million, which is 4.95% above collections for the same month last year, and marks the third consecutive positive growth month for sales tax collections since the state’s fiscal year began.

“On a percentage basis, October represents the highest sales tax growth in any month since April 2007,” Finance and Administration Commissioner Dave Goetz said. “We’re still a long way from meeting the collections we experienced in 2008, so the state must continue to be diligent in monitoring expenditures in order to leave the next governor with a balanced budget.”

On an accrual basis, October is the third month in the 2010-2011 fiscal year.

October collections were $24.4 million more than the budgeted estimate. The general fund was over collected by $28.6 million and the four other funds were under collected by $4.2 million.

Sales tax collections were $24.1 million more than the estimate for October. The October growth rate was 6.38 %. Year-to-date the growth rate is 3.93%.

Franchise and excise combined collections for October were $9.4 million, and they were $900,000 below the budgeted estimate of $10.3 million.

Gasoline and motor fuel collections decreased by 5.02% and they were $2.9 million below the budgeted estimate of $73.1 million.

Tobacco tax collections for the month were over collected by $300,000, and they were 0.54% over October 2009 collections.

Privilege tax collections were $400,000 less than the budgeted estimate of $20.1 million.

Inheritance and Estate taxes were over collected by $5.4 million for the month.

All other taxes were under collected by a net of $1.2 million.

Year-to date collections for three months were $59.9 million more than the budgeted estimate. The general fund was over collected by $46.3 million and the four other funds were over collected by $13.6 million.

The budgeted revenue estimates for 2010-2011 are based on the State Funding Board’s consensus recommendation of April 7, 2010 and adopted by the second session of the 106th General Assembly in June. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

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Press Releases

State Blames Flood For Underperforming Revenue Collections

State of Tennessee Press Release; July 13, 2010:

NASHVILLE — Total tax collections for June were below budgeted estimates, but recorded positive growth in sales and corporate taxes. Finance and Administration Commissioner Dave Goetz today announced that overall June revenues were $1.062 billion, which is $6.2 million less than the state budgeted. June sales tax collections represent consumer spending that took place in the month of May.

“This marks the third consecutive month in which sales tax collections recorded positive growth over the same month a year ago,” Goetz said. “While the positive growth for June is small, remember that consumer spending was depressed in May as a result of the unprecedented flooding the state endured. Although we believe that Tennessee is in the early stages of economic recovery we will continue to be diligent in monitoring the state’s spending in order to keep our budget in balance on a recurring basis.”

On an accrual basis, June is the eleventh month in the 2009-2010 fiscal year.

The general fund was under collected by $9.3 million, and the four other funds were over collected by $3.1 million.

Sales tax collections were $16.8 million less than the estimate for June. The June growth rate was 0.73%. For eleven months revenues are under collected by $224.7 million. The year-to-date growth rate for eleven months was negative 3.01%.

Franchise and excise taxes combined were $20.9 million above the budgeted estimate of $228.9 million. The growth rate for June was 5.17%. For eleven months revenues are over collected by $75.8 million and the year-to-date growth rate was 6.55%.

Privilege tax collections were $8,000 below the June estimate. For eleven months collections are $23.8 million below the budgeted estimate.

Business tax collections were $14.4 million less than the June estimate. Year-to-date collections for eleven months are $23.0 million below the budgeted estimate.

Inheritance and estate tax collections were $3.6 million below the June estimate. For eleven months collections are $12.1 million below the budgeted estimate.

Tobacco tax collections were $3.1 million above the budgeted estimate of $25.7 million. For eleven months revenues are over collected by $6,000.

Gasoline and motor fuel collections for June increased by 5.27%. For eleven months revenues are under collected by $8.1 million.

Year-to-date collections for eleven months were $225.5 million less than the budgeted estimate. The general fund was under collected by $179.3 million and the four other funds were under collected by $46.2 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 mid-year 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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Press Releases

Revenue Collections Up in April

State of Tennessee Press Release; May 12, 2010:

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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News

February State Revenue Collections Likely ‘Worse Than We Had Hoped’

Lackluster tax collections could force the state to lower its revenue estimates even further as lawmakers on Capitol Hill debate how to best balance the books, the state budget director said Tuesday.

That’s going to mean lawmakers may have many millions of dollars less than the $10.1 billion they expected to work with this year as they enter the final months of the legislative session. They plan to spend that time finalizing a state spending plan based on expected revenues from gasoline, sales and other taxes.

“I think there’s a good prospect that we may have to lower our revenue estimates some more, but I really cannot tell you how much,” Bill Bradley, state budget director, told members of the Senate Finance, Ways and Means committee Tuesday.

The amount of revenue collected in February for January sales is still being finalized, and those numbers will likely be released next week.

“I certainly would think that the collections, when we close for February, are likely to be worse than we had hoped for,” Bradley said.

February would mark the twenty-first consecutive month revenues have been down in Tennessee.

Revenue from December sales — which were collected in January — were $16 million less than the state projected. The month before, revenues were down $54 million.

The most recent revenue collections indicate that Tennessee has collected $185 million less than it expected since its fiscal year began in July.

If the state lowers revenue estimates for the rest of the current budget year, the state will also have to lower the base budget for the next year, said Lola Potter, spokeswoman for the Department of Finance and Administration.

Otherwise, she said,  “we would be digging an even bigger hole for the state.”

The state will want to start the new budget year assuming the same revenue trend as prior months, she said. If the state has less revenue through June than it expected, she said the state can expect collections to follow that trend.

“To keep the state’s budget in balance we have to lower the budget in line with those revenue projections,” she said.

Estimates on how much the state would collect in tax revenue were first lowered in December to $10.12 billion from $10.29 billion.

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News

December Revenues $16.1M Less Than State Expected

The state collected more tax revenues in December than it did the last month of 2008 — possibly signaling that lackluster tax revenues could be inching closer to a turnaround, officials said Wednesday.

But revenues were still $16.1 million down for December, marking the twentieth month tax collections missed the mark for budget estimates.

“Better news, not good news. But maybe we’re at last starting to see some sort of turn,” said Finance and Administration Commissioner Dave Goetz.

Much of the growth came from franchise and excise tax revenues along with car sales, according to Goetz.

Tax collections represent a huge chunk of state revenues that pay for public services, programs and other state spending. Tennessee officials expected to see $10.2 billion in tax revenues this year, roughly a third of the money needed to fund the year’s state budget, according to state budget documents.

The consistently weak revenue collections have created a $1.5 billion hole in this year’s budget. Lawmakers will have until June 30, the end of the fiscal year, to fill that hole.

Although tax collections were down from expectations, revenues topped off at $947.4 million for December activity, surpassing last year’s revenues of $936.3 million. The tax revenues were collected in January.

Here’s a breakdown:

  • Sales taxes were $20.4 million less than estimated.
  • Franchise and excise taxes combined coasted $11.3 million above budgeted projections.
  • Gasoline and motor fuel collections were $4.2 million below budget.
  • Tobacco tax revenues were $451,000 above estimates.
  • Inheritance and estate taxes raked in $1.8 million more that projected.
  • All other taxes were under collected by a total of $5.1 million.
  • Car sales grew from 2.8 percent in November, to 6.65 percent in December and 6.54 percent in January.

“The numbers are not good. It’s due to this economy and hopefully we’ll start pulling out of this recession,” said former House Speaker Rep. Jimmy Naifeh, D-Covington.

Sales taxes were down by 1.86 percent in December, which alone represents a $12 million falloff from revenue expectations, according to the Department of Finance and Administration.

“It is nice to see the gap has closed somewhat, but it’s kind of disappointing that this was the tax revenue from the Christmas season when you really had the hope maybe there’d be a big bump,” said Rep. Bill Dunn, R-Knoxville. “It’s moving in the right direction, but it’s still not good news,”

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Liberty and Justice News

Traffic Camera Legislation Promised, But Not Before April

The House sponsor of a proposal to regulate red-light traffic cameras made assurances this week that he’ll try to pass some form of the bill this year.

However, nobody should expect any legislative action for another six weeks, said Rep. Bill Harmon, D-Dunlap.

He made the announcement Tuesday as he asked the Public Safety Subcommittee to forward the current version of the bill to the full House Transportation Committee.

Harmon said he wants to sit on the bill until April 1 so that agencies and groups like the Department of Safety, Department of Transportation, the Municipal League, sheriff and police chief associations and traffic engineers can attempt reaching an agreement on a final version.

Whatever they come up with will be made available well enough in advance so lawmakers can study it before having to vote on the bill, said Harmon.

Harmon said if the group does not finalize recommendations by April 1, he’ll push all bills related to traffic cameras.

“If that’s not putting the pressure on, I don’t know what,” he continued. “I’m disappointed we can’t move this bill as-is, to be honest with you.”

Rep. Chad Faulkner, R-Luttrell, asked Harmon if he’s fully committed “to do something after April 1.”

“If I do not have something brought to this committee by April 1, I’ll be asking you pass the bill I had originally without their recommendations,” Harmon responded.

Under Harmon’s current proposal, no government would be allowed to enter into, or renew, a contract with a private red-light camera vendor for two years, except for the traffic camera on Hixson Pike in Chattanooga. In addition, fines for first time violators would be reduced from $50 to $10.

In the end, the legislation could hinge on a state attorney general’s opinion Rep. Tony Shipley, R-Kingsport has requested.

Among Shipley’s questions for the Tennessee Department of Justice:

  • Do alleged red-light violators have a right to confront their accusers, as guaranteed by the Sixth Amendment of the U.S. Constitution?
  • Do the camera systems replace the presumption of innocence with the presumption of guilt?
  • Do the systems create a lack of uniformity in traffic laws throughout the state, which could potentially create a lack of equal protection?

Shipley, who submitted the requested opinion on January 9, said he’s received no word as to when the opinion will be delivered.

A spokeswoman for the Attorney General Robert Cooper declined questions, saying all requested opinions are “confidential” until they are released on their web site.

Shipley, who said red-light camera systems are operating in his Kingsport-area district, indicated he’s neutral on whether or not they ought to be banned in Tennessee.

“I’m against them if they are unconstitutional,” he said. “Anecdotally, they have saved lives.”

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Press Releases

TN’s January State Tax Collections Down

State of Tennessee Press Release, Feb. 10, 2010

NASHVILLE – Tennessee sales tax collections continue to be a concern for the state’s general fund. Negative growth in sales tax collections continued in January, with overall January revenues coming in at $947.4 million, which is $16.1 million less than the state budgeted.

“January is the 20th consecutive month in which sales taxes have recorded negative growth.” Finance and Administration Commissioner Dave Goetz said. “January collections represent December holiday sales, which brought reports of positive growth at the national level, so it’s very disappointing that we didn’t have a similar experience in Tennessee.

“Despite the severe national recession, the state will continue to monitor spending in order to end the fiscal year with a balanced budget as required by the state’s constitution,” Goetz said.

On an accrual basis, January is the sixth month in the 2009-2010 fiscal year.

The general fund was under collected by $5.2 million and the four other funds were under collected by $10.9 million.

Sales tax collections were $20.4 million less than the estimate for January. The January growth rate was negative 1.86%. For six months revenues are under collected by $159.0 million. The year-to-date growth rate for six months was negative 5.72 %.

Franchise and excise taxes combined were $11.3 million above the budgeted estimate of $128.5 million. For six months revenues are over collected by $5.9 million.

Gasoline and motor fuel collections for January increased by 5.77 % but were $4.2 million below the budgeted estimate of $71.2 million. For six months revenues are under collected by $14.1 million.

Tobacco tax collections were $451,000 above the budgeted estimate of $21.9 million, and for six months they are $4.3 million over the budgeted estimate.

Inheritance and estate taxes were over collected by $1.8 million for the month.

All other taxes were under collected by a net of $5.1 million.

Year-to-date collections for six months were $185.1 million less than the budgeted estimate. The general fund was under collected by $152.3 million and the four other funds were under collected by $32.8 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 again on December 18, 2009 and adopted revised revenue ranges for 2009-2010. The revised ranges reflect growth rates ranging from -1.50 % to -0.25 % in total taxes, and -2.35 % to – 0.85% in general fund taxes.

Based on the funding board’s 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. The revised estimates 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.

Categories
Press Releases

TFT: ‘Tax Cuts, Not Service Cuts’ in a Recession

Press Release from Tennesseans for Fair Taxation, Feb. 1, 2010:

“It’s time for the General Assembly to enact a plan that gives tax cuts, not service cuts, that will help end the recession and help every Tennessee family balance their family budget,” said John G. Stewart, state chair of Tennesseans for Fair Taxation, an advocacy group working for tax modernization in Tennessee.

“Governor Bredesen proposes service cuts and personnel cuts in the middle of the worst economic crisis in a generation, steps that can only slow down or even derail economic recovery in Tennessee. He’s proposing to tap the rainy day fund with no plan to replenish it in the future. This makes no sense at all. “

“He should be looking to put more money in the pockets of Tennesseans, helping businesses increase profits, and keeping experienced and valuable state employees, teachers, and public safety officers on the payroll rather than dumping them on to unemployment lines,” said Stewart

Stewart urged the General Assembly to pass “The Tax Cut and Jobs Creation Act,” (SB3235/HB3597), sponsored by Sen. Reginald Tate and Rep. Johnnie Turner. As filed, this bill provides for the following:

  • Eliminates the state portion of the sales tax on food
  • Cuts the state share of the sales tax on other goods to a 5% rate
  • Cuts the business franchise tax by more than half
  • Eliminates the Hall income tax
  • Establishes a tax on personal income at a flat 5.5% rate with a $20,000 exemption for individuals, $30,000 exemption for heads of households, and $40,000 exemption for joint filers plus $2,500 deduction for each dependent

“The bottom line is that approximately 70% of Tennesseans would have more money in their pockets than they have now, businesses would receive a well-deserved tax break when they most need it, and the state would have an additional $200 million -$400 million to apply to the revenue shortfall. This means saving essential jobs and avoiding recession-enhancing cutbacks in public services in the midst of a recession and providing a way to replenish the rainy day fund later,” Stewart said.

Additional details of this legislation and the similar SB3236/HB3596, along with an explanation of other tax modernization legislation supported by TFT, are in the attached fact sheet.