March 2018 Revenues Less than Expected, While Year-To-Date State Revenues Remain More than Budgeted
NASHVILLE, Tenn. – Department of Finance and Administration Commissioner Larry Martin today announced that Tennessee tax revenue fell short of budgeted estimates in March. Overall March revenues totaled $1.1 billion, which is $84.1 million more than the state collected in March of 2017, but $2 million less than the budgeted estimate for the month.
"Sales tax revenues for March recorded exceptionally strong growth which was expected, but we were only slightly more than the budgeted estimate,” Martin said. “This is due in part to growing over an extraordinarily constricted base from the same time period one year ago when the Department of Revenue implemented a new tax administration system. March sales tax revenues reflect retail activity occurring in February. Franchise and excise tax recorded negative growth for March and were also less than the monthly budgeted estimate. All other revenues combined marginally exceeded the March estimate.
“On a year-to-date basis, the total reported revenue growth is 4.41 percent and includes several one-time events. Removing those events, one-time franchise and excise receipts, pre-payments made for 2017 Hall income taxes, and the adjusted increase in earmarked revenue the underlying growth is 4.36 percent. Corporate tax revenues show a negative growth of 6.77 percent for the year, but after adjusting for the 2017 and 2018 one-time payments included in the receipts, the growth rate is a positive 2.81 percent. All other combined revenues, on a year-to-date basis, reflect a positive 13.06 percent growth, but after adjusting for the accelerated payments made in the Hall income tax the growth rate is 9.42 percent.”
On an accrual basis, March is the eighth month in the 2017-2018 fiscal year.
General fund revenues were $5 million less than the budgeted estimate while the four other funds that share in state tax revenues were $3 million more than the estimates.
Sales tax revenues were $4.6 million more than the estimate for March and were 10.74 percent more than March 2017. For eight months revenues are $57.2 million more than estimated. The year-to-date growth rate for eight months was 4.73 percent.
Franchise and excise tax revenues combined were $9.4 million less than the budgeted estimate in March, and the growth rate was negative 1.88 percent. For eight months revenues are $35.6 million more than the estimate and the year-to-date growth rate is negative 6.77 percent. However, adjusting for the one-time payments received last fiscal year and this fiscal year produces a year-to-date underlying growth rate of 2.81 percent.
Gasoline and motor fuel revenues for March increased by 17.93 percent compared to March 2017 and were $900,000 less than the budgeted estimate of $79.1million. For eight months revenues have exceeded estimates by $5.7 million.
Motor vehicle registration revenues were $4.4 million more than the March estimate, and on a year-to-date basis they are $15.2 million more than estimates.
Tobacco tax revenues were $500,000 less than the March budgeted estimate of $19.6 million. For eight months revenues are $5.3 million less than the year-to-date budgeted estimate.
Inheritance and estate tax revenues were flat in March. On a year-to-date basis revenues for eight months are $2.5 million less than the budgeted estimate.
Privilege tax revenues were $2.1 million more than the March estimate, and on a year-to-date basis, August through March, revenues are $11.8 million more than the estimate.
Business tax revenues were $500,000 more than the March estimate. For eight months revenues are $1.4 million more than the budgeted estimate.
Hall income tax revenues for the month were $1.1 million less than the budgeted estimate. For eight months revenues are $62.3 million more than the budgeted estimate driven by substantial pre-payment of 2017 taxes.
All other taxes were less than budgeted estimates by a net of $1.7 million.
Year-to-date revenues for eight months were $179.7 million more than the budgeted estimate. The growth rate for eight months was 4.41 percent. The general fund recorded $130 million more than budgeted estimates and the four other funds $49.7 million.
The budgeted revenue estimates for 2017-2018 are based on the State Funding Board’s consensus recommendation of November 29, 2016 and adopted by the first session of the 110th General Assembly in May 2017. Also incorporated in the estimates are any changes in revenue enacted during the 2017 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.