NASHVILLE– Department of Finance and Administration Commissioner Stuart McWhorter today announced that Tennessee tax revenues were lower than budgeted estimates for the month of July. Overall, July revenues totaled $1.2 billion, which is $44.3 million more than the state collected in July of 2018, but $13.1 million less than the budgeted estimate for the month.
“Sales tax revenues in July recorded modest growth compared to the same time period last year and were slightly higher than the month’s budgeted estimate,” McWhorter said. “State corporate tax revenues, composed of franchise and excise taxes, underperformed in the month against the budgeted estimate, as did all other tax revenue combined.
“Even with July’s monthly revenues being short of our budgeted expectations, the state will finish the 2018-2019 fiscal year above our estimated projection. Revenues grew by 5.46% more than last year and are $636.1 million more than the established budgeted estimate. Adjusting for an additional $161 million added from the November 2018 funding board, total state revenues will actually finish $475.1 million more than the revised total revenue estimate. Similarly, the state’s general fund revenues will have outperformed the original budget estimate by $580.4 million or by $461.3 million after adjusting for the revised estimate.”
On an accrual basis, July is the final month in the 2018-2019 fiscal year and reported revenues will be subject to final accrual adjustments that may increase or decrease the recorded cash amounts on an audited basis.
General fund revenues in the month of July were less than the budgeted estimates in the amount of $9.2 million and the four other funds that share in state tax revenues were also $3.9 million less than the estimates.
Sales tax revenues were $6.1 million more than the estimate for July and they were 3.04% more than July 2018. July sales tax revenues reflect retail business activity that occurred in June. For the year, revenues are $297.8 million higher than estimated. The yearly growth rate is 5.55%.
Franchise and excise tax revenues combined were $12.7 million less than the budgeted estimate in July, however the growth rate compared to July 2018 was 19.42%. For the year, revenues are $217.1 million more than the estimate and the year-to-date growth rate is 7.59%.
Gasoline and motor fuel revenues for July increased by 3.90% compared to July 2018, but they were $6.8 million less than the budgeted estimate of $106.6 million. For the year, revenues were short of estimates by $1.9 million.
Motor vehicle registration revenues $0.4 million more than the July estimate, and for the year revenues are $27.2 million more than the estimate.
Tobacco tax revenues were $5 million less than the July budgeted estimate of $22.3 million. For the year, they are $9.5 million less than the budgeted estimate.
Hall income tax revenues for July were $1.4 million more than the budgeted estimate. For the year, revenues are $45.1 million more than the budgeted estimate.
Privilege tax revenues were $0.7 million more than the July estimate, and for the year, August through July, revenues are $11.7 million more than the estimate.
Business tax revenues were $1 million more than the July estimate. For the year, revenues are $24 million more than the budgeted estimate.
All other tax revenues were more than July estimates by a net of $1.8 million.
For the year, revenues were $636.1 million more than the budgeted estimate. The general fund recorded $580.4 million more than budgeted estimates and the four other funds $55.7 million.
The budgeted revenue estimates for 2018-2019 are based on the State Funding Board’s consensus recommendation of Nov. 27, 2017 and adopted by the second session of the 110th General Assembly in May 2018. Also incorporated in the estimates are any changes in revenue enacted during the 2018 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
On Nov. 20, 2018 the Funding Board met to hear updated revenue projections from the state’s various economists. On Nov. 26, 2018 the board adopted revised recurring revenue growth ranges for the 2018-2019 fiscal year. The current fiscal year’s revised ranges recognize recurring growth in total taxes from a low of 2.35% to a high of 3.25%, and a general fund growth from a low of 2.20% to a high of 3.20%.
On April 30, 2019 in the first session of the 111th General Assembly, the legislature passed the 2019-2020 budget, which included the Funding Board’s current year revised ranges and also the administration’s amendment to the proposed budget. The governor signed the budget bill on May 17, 2019.
With the passage of the appropriations act, Public Chapter 405, the General Assembly recognized in the current fiscal year an additional $161 million in total revenue and a corresponding increase in general fund revenue in the amount of $119.1 million.