|FOR IMMEDIATE RELEASE
FRIDAY, JUNE 11, 2010
CONTACT: LOLA POTTER
NASHVILLE - State tax collections for May were less than budgeted, yet included positive growth in state sales tax collections. Finance and Administration Commissioner Dave Goetz reports that overall May revenues were $767.1 million, which is $18.6 million less than the state budgeted. May sales tax collections represent consumer spending that occurred in the month of April.
“May is the second consecutive month this fiscal year in which sales tax collections posted positive growth over the year before; and before April, we had not seen positive growth since May of 2008," Goetz said. “This is encouraging and we hope this marks the beginning of economic recovery for Tennessee. However, we will continue to closely monitor collections and do whatever is necessary to end this fiscal year with a balanced budget and leave the next governor with a balanced budget on a recurring basis.”
On an accrual basis, May is the tenth month in the 2009-2010 fiscal year.
The general fund was under-collected by $16.5 million, and the four other funds were under-collected by $2.1 million.
Sales tax collections were $6.1 million less than the estimate for May. The May growth rate was positive 3.70%. For ten months revenues are under-collected by $207.9 million. The year-to-date growth rate for ten months was negative 3.38%.
Franchise and excise taxes combined were $8.5 million below the budgeted estimate of $31.4 million. The growth rate for May was negative 12.50%. For ten months revenues are over collected by $54.9 million and the year-to-date growth rate is 6.86%.
Privilege tax collections were $1.4 million below the May estimate. For ten months collections are $23.8 million below the budgeted estimate.
Tobacco tax collections were $2.2 million under the budgeted estimate of $24.9 million. For ten months revenues are under collected in the amount of $3.1 million.
Gasoline and motor fuel collections for May increased by 6.38%. For ten months revenues are under-collected by $15.4 million and the ten month year-to-date growth rate is 0.48%.
Year-to-date collections for ten months are $219.3 million less than the budgeted estimate. The general fund was under collected by $170.1 million and the four other funds were under collected by $49.2 million.
The budgeted revenue estimates for 2009-2010 are based on the state funding board’s consensus recommendation adopted by the first session of the 106th General Assembly in May of 2009, and are available on the state’s website at http//www.tn.gov/finance/bud/budget.html.
The state funding board met on December 18, 2009 and adopted mid-year revised revenue ranges for 2009-2010. The revised ranges reflect growth rates ranging from negative 1.50% to negative 0.25% in total taxes, and negative 2.35% to negative 0.85% in general fund taxes. Based on the consensus recommendation, the official budgeted estimates for 2009-2010 were revised in late December.
The revised mid-year estimates are reflected on pages A-70 and A-72 in the 2010-2011 budget document and assume an under collection in total taxes in the amount of $161.3 million, and an under collection of $153.2 million in the general fund.
The funding board met again in March of this year and adopted final revenue ranges for 2009-2010. The board’s consensus recommendation was to recognize lower growth rates than those adopted on December 18, 2009. The revised ranges reflect growth rates ranging from negative 1.77% to negative 1.29% for total taxes, and negative 2.31% to negative 1.78% in general fund taxes.
Based upon the funding board’s March recommendation the revised estimates for 2009-2010 now assume an under collection in total taxes in the amount of $258.9 million, and an under collection of $231.0 million in general fund taxes.