NASHVILLE - Tennessee's sales tax collections dropped to a record low in April with a negative growth rate. Finance and Administration Commissioner Dave Goetz reported today that overall April revenues were $1.39 billion or $88.9 million less than the state budgeted.
"Almost two dozen other states are experiencing similar revenue conditions; we expected a slowdown in growth, but nothing this dramatic," Goetz said. "We are committed to keeping our spending in line with revenues, while balancing the budget without raising taxes or raiding the Rainy Day Fund to cover the shortfall."
On an accrual basis, April is the ninth month in the 2007-2008 fiscal year.
The general fund was under collected by $92.8 million, and the four other funds were over collected by $3.9 million.
Sales tax collections were $49.8 million less than the estimate for April. The April growth rate was negative 4.08%. For nine months revenues are under collected by $167.5 million. The year-to-date growth rate for nine months was 1.11%.
Franchise and excise taxes combined were $50.4 million below the budgeted estimate of $428.9 million. For nine months revenues are under collected by $136.8 million.
Hall Income tax collections for April were $33.3 million more than the estimate. For nine months collections are $28.6 million more than the estimate. The growth rate for the nine month period was 17.2%.
Inheritance and estate tax collections were $1.7 million above the April estimate. For nine months collections are $6.6 million above the budgeted estimate.
Gasoline and motor fuel collections for April increased by 2.58%. For nine months revenues are over collected by $8.3 million.
Tobacco tax collections were $9.2 million under the budgeted estimate of $33.1 million. For nine months revenues are under collected in the amount of $61.2 million.
Year-to-date collections for nine months were $356.9 million less than the budgeted estimate. The general fund was under collected by $368.6 million and the four other funds were over collected by $11.7 million.
The budgeted revenue estimates are based on the State Funding Board's consensus recommendation adopted by the first session of the 105th General Assembly in June of 2007.
The revised estimates for this fiscal year as presented in the 2008-2009 Budget Document assumes an under collection in total taxes in the amount of $165.4 million. By tax source the assumed under collections are: Sales tax $62.8 million; F&E taxes $54.8 million; tobacco taxes $30.0 million; privilege taxes $27.6 million; and, a net over collection of$9.8 million from all other tax sources. The General Fund under collection is projected to be $180.0 million.
The State Funding Board met on April 29 and May 1, 2008 and adopted revised revenue growth ranges for the current fiscal year ranging from 0.25% to 1.00% for total taxes and -0.50% to 0.25% in general fund taxes.
Theses ranges recognize a revenue shortfall in total taxes from the original budgeted estimates in the amount of $562.8 million at the low end to $479.9 million at the high end. The ranges for the general fund recognize a shortfall of $564.0 million at the low end to $494.5 million at the high end.