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Press Releases

State Takes in Nearly $1B in Revenue Collections for December

Press release from the Tennessee Department of Finance & Administration; January 10, 2012:

NASHVILLE – Tennessee revenue collections for December came in stronger than the same month a year before. Finance and Administration Commissioner Mark Emkes reported today that state revenue collections for December were $982.2 million, which is 1.71% above December 2011. December sales tax collections represent consumer spending that occurred in November.

“Total revenues in December were higher than expected due to over collections in the sales and corporate tax categories,” Emkes said. “We believe the December sales tax growth rate, which includes ‘Black Friday’ and after-Thanksgiving sales, may reflect renewed consumer confidence, but January’s report will give us a fuller picture with Christmas retail activity.

“Because of anticipated requirements for Fiscal Year 2014, we will closely monitor our spending for the balance of this year, working closely with the Legislature in order to end this year with a balanced budget.”

On an accrual basis, December is the fifth month in the 2012-2013 fiscal year.

December collections were $22.0 million more than the budgeted estimate. The general fund was over collected by $24.8 million and the four other funds were under collected by $2.8 million.

Sales tax collections were $11.7 million more than the estimate for December. The December growth rate was 5.01%. For five months revenues are under collected by $18.3 million, and the year-to-date growth rate is 2.51%.

Franchise and excise taxes combined were $12.6 million above the budgeted estimate of $230.4 million. For five months revenues are over collected by $91.4 million.

Gasoline and motor fuel collections for December decreased by 7.52% and they were $3.4 million below the budgeted estimate of $66.1 million. For five months revenues are under collected by $11.8 million.

Tobacco tax collections were $2.2 million below the budgeted estimate of $24.9 million, and for five months they are $6.7 million below the budgeted estimate.

Privilege tax collections were $3.8 million more than the budgeted estimate of $14.5 million. Year-to-date collections for five months are $10.8 million above the budgeted estimate.

Inheritance and estate taxes were under collected by $1.6 million for the month. For five months collections are $4.4 million above the budgeted estimate.

All other taxes were over collected by a net of $1.1 million.

Year-to-date collections for five months were $73.6 million more than the budgeted estimate. The general fund was over collected by $84.1 million and the four other funds were under collected by $10.5 million.

The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

The State Funding Board met on December 14, 2012 to hear updated revenue projections from the state’s various economists. The board met again on December 19 and adopted revised revenue ranges for 2012-2013. The revised ranges assume an over collection from the July 2012 budgeted estimate in the amount of $203.0 million to $287.3 million in total taxes and in the amount of $224.2 million to $305.9 million in general fund taxes for the current fiscal year.

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Press Releases

June Tax Collections Up

Press Release From the State of Tennessee, July 11, 2011:

NASHVILLE – Total tax collections for June were above state budget estimates for the month. Finance and Administration Commissioner Mark Emkes today announced that overall June revenues were $1.07 billion, which is $31.8 million more than the state budgeted. June sales tax collections represent consumer spending that took place in the month of May.

June marks the 11th consecutive month this fiscal year in which total collections have exceeded the budgeted estimates. Sales tax collections in June recorded the 15th consecutive month of positive growth, exceeding the budgeted estimate, and corporate tax collections also performed above June expectations.

“Tennessee’s revenue collections continue to show a positive growth trend, but the latest national leading economic indicators point to a very slow economic recovery,” Emkes said. “This will require us to continue to closely monitor collections and expenditures for the remainder of this year in order to end this fiscal year with a balanced budget.”

On an accrual basis, June is the eleventh month in the 2010-2011 fiscal year.

The general fund was over collected by $31.1 million, and the four other funds were over collected by $700,000.

Sales tax collections were $28.8 million more than the estimate for June. The June growth rate was 6.32%. For eleven months revenues are over collected by $195.6 million. The year-to-date growth rate for eleven months was positive 4.60%.

Franchise and excise taxes combined were $29.6 million above the budgeted estimate of $253.2 million. The growth rate for June was 13.18%. For eleven months revenues are over collected by $47.8 million and the year-to-date growth rate was 6.99%.

Privilege tax collections were $3.7 million below the June estimate. For eleven months collections are $9.7 million below the budgeted estimate.

Business tax collections were $20.3 million less than the June estimate. Year-to-date collections for eleven months are $38.8 million below the budgeted estimate.

Inheritance and estate tax collections were $800,000 below the June estimate. For eleven months collections are $26.7 million above the budgeted estimate.

Tobacco tax collections were $1.6 million below the budgeted estimate of $29.5 million. For eleven months revenues are under collected.

Categories
Business and Economy NewsTracker Tax and Budget

More Revenues Means More Spending

Gov. Bill Haslam said Tuesday his conversations with legislators “have been very positive” regarding his budget proposal that will be addressed head-on in the next few days.

Haslam, capitalizing on a recent increase in revenues, unveiled an amendment this week to his original $30.2 billion budget plan announced in March. It includes $71.3 million in disaster relief funds after recent storms and flooding.

The state recently announced net positive growth of 1.7 percent in revenue over last year for April, taking in $1.264 billion, which was $600,000 more than budgeted. It was the 13th consecutive month of positive growth.

Based on new estimates of increased revenues, Haslam has filed a supplemental appropriations amendment that includes the disaster relief and restored funds for various health-related programs.

“Everybody likes it when you can spend more. We were going to have to make some cuts, particularly some of the TennCare cuts. None of us liked it. I didn’t like the mental health cuts myself,” Haslam said Tuesday. “So having the extra money, almost everyone is going to see that as a good thing.”

The funding priorities in the amendment listed by the administration include:

  • $4.7 million for the Department of Intellectual Disabilities Services restoring residential rates.
  • $1.9 million for mental health services for Northeast Tennessee through the Mountain State Health Alliance.
  • $8.5 million to restore rate reductions for TennCare mental health providers.
  • $5 million for the Memphis Regional Medical Center, Nashville General Hospital and Jellico Community Hospital.
  • $3.5 million for smoking cessation help in TennCare.
  • $6.9 million for programs at Meharry Medical College.
  • $220,000 for debt service on construction bonds for a $22.6 million, 108-bed state veterans’ home in Clarksville.

Haslam said Tuesday he believes an approach of being open about funding has been beneficial.

“I think the fact we’ve been up front all along with, ‘Here’s the money we have,’ when the extra money came in, we were very specific about what it was and what we were going to spend it on,” he said.

Haslam said the biggest financial surprise handed the state was money owed to Tennessee from the federal Centers for Medicare and Medicaid services.

The amendment anticipates reimbursement of roughly $82 million in Medicaid funding errors. It is projected to cover $15.7 million for nursing home funding; $7.9 million for TennCare services including lab, X-ray, dental and transportation services; and $3.4 million for home health provider services. Meanwhile, $15.9 million for capital outlays in higher education are expected.

Other priorities in the budget amendment listed by the administration are $19 million for lottery scholarships in summer school; $5 million for the University of Memphis to operate the Lambuth campus in Jackson; $21 million for building maintenance; and $16.5 million for what the administration calls “a potential major economic development expansion project,” without elaboration.

Haslam reiterated warnings this week, however, about non-recurring funds, saying the budget includes $160 million in non-recurring money that will not be available next year.

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Press Releases

State Reports Tax Revenue Jump in July

Press Release from the State of Tennessee, Aug. 10, 2010

NASHVILLE – State sales tax revenues for July jumped with the largest monthly growth in over three years. Finance and Administration Commissioner Dave Goetz today reported July’s total revenue collections were up from July of last year. The last month in which sales tax collections exceeded this month’s growth rate was April of 2007.

“We believe the growth in both sales and corporate tax collections point to an economic recovery in Tennessee; however, we will continue to be cautious, keeping our budget in balance as we move forward,” Goetz said. “Franchise and Excise tax collections showed negative growth for the month, but this can be attributed to significant one-time payments received in July of 2009.The year-to-date growth in our corporate tax collections have shown considerable improvement over last year, posting a gain of over 4 percent,” Goetz said.

Overall, July revenues were $833.6 million or $22.5 million more than the state budgeted.

On an accrual basis, July is the twelfth month in the 2009-2010 fiscal year.

The general fund was over collected by $28.0 million, and the four other funds were under collected by $5.5 million.

Sales tax collections were $1.0 million less than the estimate for July. The July growth rate was 5.94%. For twelve months revenues are under collected by $225.7 million. The year-to-date growth rate for twelve months was negative 2.25%.

Franchise and excise taxes combined were $7.5 million over the budgeted estimate of $44.0 million. The growth rate for July was negative 36.40%. For twelve months revenues are over collected by $83.3 million and the year-to-date growth rate was positive 4.01%.

Inheritance and estate tax collections were $1.8 million above the July estimate. For twelve months collections are $10.4 million below the budgeted estimate.

Privilege tax collections were $1.1 million below the July budgeted estimate. For twelve months collections are $24.8 million less than the budgeted estimate, and the year-to date growth rate was negative 3.15%.

Tobacco tax collections were $1.2 million above the budgeted estimate of $25.3 million. For twelve months revenues are over collected by $1.2 million.

Gasoline and motor fuel tax collections for July decreased by 0.36 %. For twelve months revenues are under collected by $8.2 million.

Year-to-date collections for twelve months were $203.0 million less than the budgeted estimate. The general fund was under collected by $151.3 million and the four other funds were under collected by $51.7 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 compared to the July 2009 official budgeted estimates 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.

Year-to-date collections for 2009-2010 are subject to final accrual adjustments.

Categories
News

State Budget Gap Widening

The State of Tennessee has dug itself into a hole this budget year, and most indications are it’s only getting deeper.

For almost two years now, the state’s economic prognosticators and financial wizards have overestimated how the economy would perform. Those projections are used by Capitol Hill lawmakers to guess how much the state will collect in state revenues, which in turn is used to plan government’s spending.

Today the Tennessee State Funding Board will begin meeting to discuss the amount of revenue the state can expect in the next budget year that begins July 1.

The board, which includes the state treasurer, secretary of state, state comptroller, state finance director and the governor, will also consider again revising estimates it last revisited in December.

In the last 21 months, state revenue collections on taxes and fees have been lower than predicted.

Constitutionally, the state can’t really skip out on a payment and take care if it next year. Tennessee’s guiding document prohibits state government from carrying a deficit from one year to the next, which means lawmakers have to find a way to balance the books.

In an op-ed Gov. Phil Bredesen penned last month, he wrote: “My goal has been to remain true to the principle of the ‘family budget’ that I’ve talked about since first becoming governor. It’s nothing more than the common sense idea that we’re going to adjust expenses to match our income and be very careful about using money from our savings.

“It’s the way sensible families have to manage through these times, and while state government is much larger, the principle is the same,” he wrote.

Now, lawmakers who are already trying to figure out what cuts they can live with in next year’s budget may have to consider more reductions to government programs, pulling money out of the state’s rainy day reserves or increasing fees or taxes.

The State Funding Board, which reviews and adopts revenue estimates lawmakers base the budget on, originally predicted the state would collect $10.29 billion this fiscal year.

After months of revenues falling short of those monthly expectations, estimates were reduced to $10.12 billion when the board met again in December. That change reflected predictions of negative growth between negative 1.5 percent and negative .25 percent in total taxes.

But numbers continued to miss the new expectations. In February, the latest reporting period, revenues were $638.9 million — which is $47.1 million less than the state budgeted.

The board will meet through the end of the month to listen to a handful of economists who will predict revenues, including Dr. Arthur Laffer, the famous “supply-side” theorist who was a member of President Reagan’s Economic Policy Advisory Board.

“The economy has been through some extraordinary changes over the last couple of years,” Comptroller Justin Wilson, a member of the board, said in a press release this week. “In light of that, I think it is appropriate to get some new perspectives on what we can expect for the year ahead.”

Members of the board will also hear from the same group of economists that helped developed the last round revenue estimates, including professionals from Tennessee universities and government offices, like Dr. William Fox, an economics professor from the University of Tennessee Center for Business and Economic Research and Dr. Albert DePrince, who teaches economics and finance at Middle Tennessee State University.

Bredesen’s $12.4 billion FY2010-2011 budget plan released in February proposes spending reductions totaling $394 million from the current year’s budget.

Categories
Press Releases

State Releases February Revenue Report

Press Release from the Department of Finance & Administration, March 9, 2010:

Nashville – State revenue collections once again fell short of budgeted estimates last month. Overall February revenues were $638.9 million, which is $47.1 million less than the state budgeted.

“This entire fiscal year has brought us negative growth in the sales tax, which is almost two-thirds of our revenue,” Finance and Administration Commissioner Dave Goetz said. “Moreover, the running total is now 21 consecutive months of negative growth in sales tax collections since January 2008, when the downward economic spiral began for us in Tennessee.”

“In spite of the budgetary challenges, we have laid out a plan for balancing the budget and we’re working with the Legislature to end this year and the next with a balanced budget, as our constitution requires.”

On an accrual basis, February is the seventh month in the 2009-2010 fiscal year.

The general fund was under collected by $43.8 million and the four other funds were under collected by $3.3 million.

Sales tax collections were $38.4 million less than the estimate for February. The February growth rate was negative 6.67%. The year-to-date growth rate for seven months is negative 5.84%.

Franchise and excise taxes combined were $1.4 million above the budgeted estimate of $33.0 million. For seven months revenues are over collected by $7.4 million. The year-to-date growth rate for seven months is 8.32%.

Gasoline and motor fuel collections for February decreased by 3.86%, but were $180,000 above the budgeted estimate of $68.3 million. For seven months revenues are under collected by $13.9 million.

Tobacco tax collections were $4.0 million under the budgeted estimate of $23.1 million. For seven months revenues are over collected in the amount of $303,000.

Year-to-date collections for seven months were $232.4 million less than the budgeted estimate. The general fund was under collected by $196.3 million and the four other funds were under collected by $36.1 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.

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 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 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.