NASHVILLE, Tenn. – Total Tennessee tax revenues for July were slightly more than the budgeted expectation. Finance and Administration Commissioner Larry Martin reported today that July, which ended the accrual fiscal year, recorded a net positive growth of 0.74%, compared to July of 2015. Overall, July revenues were $1.0 billion, which is $13.8 million more than the state budgeted.
“July revenue results were somewhat mixed,” Martin said. “With Sales taxes, we had stronger than anticipated growth but corporate and business taxes experienced negative growth. Also, all other taxes, taken as a group, were marginally below July 2015.
“Despite the mixed results in July, the year-to-date growth rate for all taxes ended the year well above last year’s revenue performance. It is important to note that despite the underperformance with corporate business taxes in July, year to date these taxes have a strong positive growth.”
On an accrual basis, July is the twelfth month in the 2015-2016 fiscal year.
General fund revenues exceeded the budgeted estimate in the amount of $11.3 million. The four other funds that share in state tax revenues were also in excess of budgeted expectations by $2.5 million.
Sales tax revenues were $29.6 million more than the estimate for July. The July growth rate was positive 5.96%. For 12 months, August through July, revenues are over budget by $375.7 million. The year-to-date growth rate for the 12-month period was positive 7.07%.
Franchise and excise taxes combined were $22.1 million less than the budgeted estimate of $78.4 million. The growth rate for July was negative 30.06%. For 12 months revenues are $349.9 million more than the budget estimate. The year-to-date growth rate was positive 3.82%; however, after factoring out the one-time tax payments received last year, the effective growth rate for twelve months is approximately 11.41%.
Privilege tax revenues were $4.8 million more than the July estimate. For 12 months revenues are $39.6 million more than the budgeted estimate.
Business tax revenues were $0.1 million less than the July estimate. Year-to-date revenues for 12 months are $11.5 million more than the budgeted estimate.
Inheritance and estate tax revenues were $2.4 million less than the July estimate. For 12 months revenues are $16.6 million more than the budgeted estimate.
Hall income tax revenues for July were $0.4 million less than the budgeted estimate. For 12 months revenues are $55.5 million more than the budgeted estimate.
Tobacco tax revenues were $0.4 million less than the budgeted estimate of $23.2 million. For 12 months revenues are $16.1 million in excess of the year-to-date estimate.
Gasoline and motor fuel revenues for July exceed estimates by $4.9 million. For 12 months revenues exceeded estimates by $40.1 million.
All other taxes for July were less than the budgeted estimates by a net of $0.1 million.
Year-to-date revenues for 12 months were $925.0 million more than the budgeted estimate. The general fund recorded revenues in the amount of $852.4 million more than the budgeted estimate, and the four other funds $72.6 million more than the budgeted estimate.
The budgeted revenue estimates for 2015-2016 are based on the State Funding Board’s consensus recommendation of December 16, 2014 and adopted by the first session of the 109th General Assembly in April 2015. Also incorporated in the estimates are any changes in revenue enacted during the 2015 session of the General Assembly. These estimates are available on the state’s website at http://www.tn.gov/finance/article/fa-budget-rev.
On November 13, 2015, the Funding Board met to hear updated revenue projections from the state’s various economists. Meeting again on November 23, 2015, the board adopted revised recurring revenue growth ranges for the 2015-2016 fiscal year. The current fiscal year’s revised ranges recognize growth in total taxes from a low of 2.80% to a high of 3.30%, and a general fund growth from a low of 2.90% to a high of 3.40%.
On April 14, 2016, in the second session of the 109th General Assembly, the legislature passed the 2016-2017 budget, which included the Funding Board’s current year revised ranges. The governor signed the budget bill on April 21, 2016.
With passage of the appropriations act, Public Chapter 758, the General Assembly recognized an additional $376.1 million in total tax revenue and a corresponding increase in general fund revenues in the amount of $355.0 million for the current fiscal year.
Year-to-date revenues for fiscal year 2015-2016 are subject to final accrual adjustments.