NASHVILLE, Tenn. – Tennessee tax revenues exceeded budgeted estimates in May, driven primarily by sales taxes. Department of Finance and Administration Commissioner Larry Martin today announced that overall May revenues were $1.0 billion, which is $41.3 million more than the state budgeted.
“Total reported receipts in May reflect significant improvement over this time last year, and were driven primarily by sales tax receipts,” Martin said. “Franchise and excise taxes fell short of May 2015 figures and were also below the monthly budgeted estimate. All other tax collections, taken as a group, were above the May estimate.”
On an accrual basis, May is the tenth month in the 2015-2016 fiscal year.
General fund revenues were more than the budgeted estimates in the amount of $37.4 million while the four other funds that share in state tax revenues were $3.9 million more than the estimates.
Sales taxes were $33.5 million more than the estimate for May and were 6.49% more than May 2015. May receipts reflect retail business activity that occurred in April. For ten months, revenues are $345.0 million higher than estimated. The year-to-date growth rate for ten months was 7.81%.
Franchise and excise taxes combined were $6.9 million lower than the budgeted estimate in May, and the growth rate over May 2015 was negative 18.63%. For ten months revenues are $286.7 million more than the estimate and the year-to-date growth rate is 3.75%. However, adjusting for last year’s very large one-time payment the underlying growth rate is positive 13.38%.
Gasoline and motor fuel revenues for May decreased by 1.10% compared to May 2015 and were $1.1 million lower than the budgeted estimate of $73.0 million. For ten months revenues have exceeded estimates by $32.0 million.
Tobacco taxes were $3.9 million above the May budgeted estimate of $19.9 million. For ten months they are $14.7 million more than the budgeted estimate.
Inheritance and estate taxes were $0.9 million below the May estimate. On a year-to-date basis revenues for ten months are $14.2 million more than the budgeted estimate.
Hall income taxes for May were $6.3 million more than the budgeted estimate. For ten months, the Hall tax is $50.8 million above the budgeted estimate.
Privilege taxes were $0.3 million more than the May estimate, and on a year-to-date basis, August through May, revenues are $23.6 million more than the estimate.
Business taxes were $3.9 million more than the May estimate. For ten months revenues are $14.6 million more than the budgeted estimate.
All other taxes were above estimates by a net of $2.3 million.
Year-to-date revenues for ten months were $798.4 million more than the budgeted estimate. The general fund recorded $735.8 million above budgeted estimates and the four other funds were $62.6 million more than the budgeted estimate.
The budgeted revenue estimates for 2015-2016 are based on the State Funding Board’s consensus recommendation of December 16th, 2014 and adopted by the first session of the 109th General Assembly in April 2015. Also incorporated in the estimates are any changes in revenue enacted during the 2015 session of the General Assembly. These estimates are available on the state’s website at http://www.tn.gov/finance/article/fa-budget-rev.
On November 13, 2015, the Funding Board met to hear updated revenue projections from the state’s various economists. Meeting again on November 23, 2015, the board adopted revised recurring revenue growth ranges for the 2015-2016 fiscal year. The current fiscal year’s revised ranges recognize growth in total taxes from a low of 2.80% to a high of 3.30%, and a general fund growth from a low of 2.90% to a high of 3.40%.
On April 14, 2016, in the second session of the 109th General Assembly, the legislature passed the 2016-2017 budget, which included the Funding Board’s current year revised ranges. The governor signed the appropriations bill on April 21, 2016.
With passage of the appropriations act, Public Chapter 758, the General Assembly recognized an additional $376.1 million in total tax revenue and a corresponding increase in general fund revenues in an amount of $355.0 million for the current fiscal year.