NASHVILLE, Tenn. – Tennessee tax revenues exceeded budgeted estimates in May. Department of Finance and Administration Commissioner Larry Martin today announced that overall May revenues were $1.1 billion, which is $53.1 million more than the state budgeted.
“Total reported revenues in May reflect significant improvement compared to this time last year and were driven primarily by sales tax receipts,” Martin said. “Franchise and Excise taxes fell short of last year’s revenues and were below the monthly budgeted estimate. All other tax revenues, taken as a group, were more than the May estimates.
“While year-to-date revenues look promising, we must continue to monitor our receipts and closely manage our expenditure patterns for the remainder of the fiscal year.”
On an accrual basis, May is the tenth month in the 2016-2017 fiscal year.
General fund revenues were more than the budgeted estimates in the amount of $43.1 million while the four other funds that share in state revenues were $10.0 million less than the estimates.
Sales taxes were $44.0 million more than the estimate for May and were 6.50% more than May 2016. May sales tax revenues reflect retail business activity that occurred in April. For ten months revenues are $248.9 million higher than estimated. The year-to-date growth rate for ten months was 3.33%.
Franchise and Excise taxes combined were $9.9 million lower than the budgeted estimate in May and the growth rate compared to May 2016 was negative 3.45%. For ten months revenues are $377.1 million more than the estimate and the year-to-date growth rate is 13.72%. However, adjusting for one-time payments received in the current year the underlying recurring growth rate is positive 3.58%.
Gasoline and motor fuel revenues for May increased by 11.19% compared to May 2016 and were $8.9 million more than the budgeted estimate of $71.0 million. For ten months revenues have exceeded estimates by $44.3 million.
Tobacco taxes were $0.6 million more than the May budgeted estimate of $21.2 million. For ten months they are $3.1 million less than the budgeted estimate.
Inheritance and estate taxes were $0.9 million less than the May estimate. On a year-to-date basis revenues for ten months are $1.4 million more than the budgeted estimate.
Hall income tax revenues for May were $2.5 million less than the budgeted estimate. For ten months revenues are $43.9 million less than the budgeted estimate.
Privilege taxes were $14.7 million more than the May estimate and on a year-to-date basis, August through May, revenues are $21.1 million more than the estimate.
Business taxes were $2.6 million less than the May estimate. For ten months revenues are $16.3 million more than the budgeted estimate.
All other taxes were less than estimates by a net of $0.8 million.
Year-to-date revenues for ten months were $677.6 million more than the budgeted estimate. The general fund recorded $621.9 million more than budgeted estimates and the four other funds $55.7 million.
The budgeted revenue estimates for 2016-2017 are based on the State Funding Board’s consensus recommendation of November 23, 2015 and adopted by the second session of the 109th General Assembly in April 2016. Also incorporated in the estimates are any changes in revenue enacted during the 2016 session. These estimates are available on the state’s website at http://www.tn.gov/finance/article/fa-budget-rev.
On November 17, 2016 the Funding Board met to hear updated revenue projections from the state’s various economists. On November 29, 2016 the board adopted revised recurring revenue growth ranges for the 2016-2017 fiscal year. The current fiscal year’s revised ranges recognize growth in total taxes from a low of 2.50% to a high of 3.00%, and a general fund growth from a low of 2.75% to a high of 3.25%.
On May 8, 2017 in the first session of the 110th General Assembly, the legislature passed the 2017-2018 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 25, 2017.
With the passage of the appropriations act, Public Chapter 460, the General Assembly recognized in the current fiscal year an additional $751.9 million in total revenue of which $623.7 is recurring, and a corresponding increase in general fund revenue in the amount of $663.3 million of which $481.1 million is recurring.