NASHVILLE, Tenn. – Tennessee Department of Finance and Administration Commissioner Stuart McWhorter today announced that overall January state tax revenues exceeded budgeted estimates. Revenues for January totaled $1.4 billion, which is $28.8 million more than budgeted and 2.81 percent greater than revenues received in January 2018.
“January sales tax revenues, reflecting consumer spending that occurred during December, remain strong and represent 22 consecutive months of positive growth. The second quarter growth rate from sales activity was 6.05 percent compared to last year, representing the highest growth rate in three years,” McWhorter said. “Corporate tax revenues also posted positive growth gains against the month’s estimate, while all other revenues finished near estimate.
“It should be noted that there was a large drop in Hall income tax revenues when compared to this same time last year due to the implementation of the federal Tax Cuts and Jobs Act (TCJA) of 2017. And, while year-to-date revenues look promising, we must continue to monitor revenues and closely manage our expenditures so that Tennessee continues to be prepared for any future economic slowdown.”
On an accrual basis, January is the sixth month in the 2018-2019 fiscal year.
General fund revenues were greater than the budgeted estimates in the amount of $26.2 million while the four other funds that share in state tax revenues were $2.6 million more than the estimates.
Sales tax revenues were $19.3 million more than the estimate for January and the growth rate was 4.24 percent. For six months revenues are $155.5 million higher than estimated. The year-to-date growth rate for six months is 5.86 percent.
Franchise and excise tax revenues were $10.2 million more than the January budgeted estimate. The growth rate compared to January 2018 was 11.60 percent. Year-to-date franchise and excise tax revenues for the first six months of this year are negative 2.96 percent and $12.9 million less than estimated. However, adjusting for the large one-time payment received last year the underlying growth rate is positive 2.26%
Gasoline and motor fuel revenues for January increased by 11.00 percent compared to January 2018 and were $1.0 million more than the budgeted estimate of $99.6 million. For six months, revenues are more than estimates by $8.0 million.
Tobacco tax revenues were $3.0 million less than the budgeted estimate of $20.4 million, and for six months they are $7.4 million less than the budgeted estimate.
Privilege tax revenues were $1.9 million less than the January estimate, and on a year-to-date basis, August through January, revenues are $5.7 million more than the estimate.
Business tax revenues were $2.5 million more than the January estimate. For six months revenues are $11.0 million more than the budgeted estimate.
Hall income tax revenues were $1.0 million less than the budgeted estimate.
All other taxes exceeded estimates by a net of $1.7 million.
Year-to-date revenues for six months were $182.9 million more than the budgeted estimate. The general fund recorded $154.9 in revenues more than estimates, and the four other funds $28.0 million more than estimates.
The budgeted revenue estimates for 2018-2019 are based on the State Funding Board’s consensus recommendation of November 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.