NASHVILLE – Tax collections for June continued to underperform, with a negative growth rate in sales taxes and declining corporate taxes.
Finance and Administration Commissioner Dave Goetz reported today that overall June revenues were $1.19 billion or $62.5 million less than the state budgeted.
“While we may continue to experience flat or negative growth rates this summer and into the fall or longer, we’ve taken the steps necessary to keep our budget in balance and guard against a state fiscal crisis,” Goetz said. “By reducing recurring expenditures, maintaining our record savings, and adjusting the budget to reflect revenue expectations, we’re in a good position to make it through predicted economic conditions.”
On an accrual basis, June is the eleventh month in the 2007-2008 fiscal year.
The general fund was under collected by $60.4 million, and the four other funds were under collected by $2.1 million.
Sales tax collections were $31.7 million less than the estimate for June. The June growth rate was negative 1.45%. For eleven months revenues are under collected by $204.5 million. The year-to-date growth rate for eleven months was 0.88%.
Franchise and excise taxes combined were $28.0 million below the budgeted estimate of $305.2 million. For eleven months revenues are under collected by $164.6 million.
Inheritance and estate tax collections were $2.6 million above the June estimate. For eleven months collections are $11.2 million above the budgeted estimate.
Tobacco tax collections were $6.3 below the budgeted estimate of $34.6 million. For eleven months revenues are under collected by $68.6 million.
Gasoline and motor fuel collections for June decreased by 0.53 %. For eleven months revenues are over collected by $11.9 million.
Year-to-date collections for eleven months were $433.6 million less than the budgeted estimate. The general fund was under collected by $444.7 million and the four other funds were over collected by $11.1 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 assume an under collection in the general fund in the amount of $180.0 million, and a shortfall of in total tax collections of $165.4.
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. These revised ranges recognize a revenue shortfall in total taxes from the original budgeted estimate 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.