June Revenues outperform estimates

NASHVILLE – Tennessee Department of Finance and Administration Commissioner Jim Bryson today announced that revenues for June were $2.2 billion, which is $547.9 million more than the budgeted monthly revenue estimate. State tax revenues were $364.3 million more than June 2021 and the overall growth rate was 19.63%.

“After experiencing slower year-over-year growth in the month of May, growth has rebounded to the levels seen during most of fiscal year 2021-2022, driven primarily by sales and corporate tax receipts,” Bryson said. “Of the $547.9 million in revenue above estimates, 48% is attributed to growth in sales tax collections while 43% is due to the growth in franchise and excise taxes. The June figures also capture $20 million in professional privilege tax payments that had been shifted from May.

“With one month of revenue reporting remaining in the 2021-2022 fiscal year, the state is on track to outperform the revenue estimates set for the year. Nevertheless, we remain steadfast in our commitment to closely watch economic conditions, especially as inflation remains high, eroding much of the gain in overall revenues.”

On an accrual basis, June is the eleventh month in the 2021-2022 fiscal year.

General fund revenues were more than the budgeted estimates in the amount of $518.8 million and the four other funds that share in state tax revenues were $29.1 million more than the estimates.

Sales tax revenues were $264.4 million more than the estimate for June and 17.33% more than June 2021. For eleven months, revenues are $2.3 billion higher than estimated. The August through June growth rate is 16.03%.

Franchise and excise tax revenues combined were $239.5 million greater than the budgeted estimate in June, and the growth rate compared to June 2021 was 24.98%. For eleven months, revenues are $1.7 billion more than the estimate and the year-to-date growth rate is 32.46%.

Gasoline and motor fuel revenues for June increased by 1.46% compared to June 2021, and they were $4.1 million more than the budgeted estimate of $107.2 million. For eleven months, revenues are greater than estimates by $50.7 million.

Motor vehicle registration revenues were $2.9 million more than the June estimate, and on a year-to-date basis, revenues are $20.6 million more than the estimate.

Tobacco tax revenues were $3.1 million less than the June budgeted estimate of $21.0 million. For eleven months, they are $4.8 million less than the budgeted estimate.

Privilege tax revenues were $27.6 million more than the June estimate, and on a year-to-date basis, August through June, revenues are $173.9 million more than the estimate.

Business tax revenues were $2.5 million more than the June estimate of $11.1 million. For eleven months, revenues are $44.2 million more than the budgeted estimate.

Mixed drink, or Liquor-by-the-drink, taxes were $7.8 million more than the June estimate.  For eleven months, revenues are $54.0 million more than the budgeted estimate.

All other tax revenues were more than estimates by a net of $2.2 million.

Year-to-date revenues, for eleven months, are $4.3 billion more than the budgeted estimate. The general fund recorded $4.0 billion more than the budgeted estimate and the four other funds were $238.2 million more than estimated.

The budgeted revenue estimates for 2021-2022 are based on the State Funding Board’s consensus recommendation of November 24, 2020 and adopted by the first session of the 112th General Assembly in April 2021. Also incorporated in the estimates are any changes in revenue enacted during the 2021 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. 17, 2021, the State Funding Board met again to hear updated revenue projections from various state economists. Following this meeting, on Nov. 23, 2021, the board decided to adopt revised revenue growth ranges for the current fiscal year. The recurring growth ranges adopted include a low of 6.80% to a high of 7.45% for total taxes and a recurring range low of 7.75% to a high of 8.50% for general fund taxes.

On April 21, 2022, in the second session of the 112th General Assembly, the Legislature passed the 2022-2023 budget, which included the Funding Board’s revised revenue ranges for the current year. Upon passage, an additional $2.936 billion in total funds and $2.870 billion in general fund revenue were added to this year’s original budgeted estimates. Public Chapter 1130, known as the appropriations bill, was signed by Gov. Lee on June 1, 2022.

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Michelle Price is the managing editor of the Upper Cumberland Business Journal and can be reached via email. Send an email.

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