Tennessee revenue collections continued their upward trend in July, but at a much slower pace compared to recent months. Finance and Administration Commissioner Mark Emkes announced on Thursday a net positive growth of 4.46% over July collections of one year ago. Overall July revenues were $880.9 million, which is $9.9 million more than the state budgeted.
July marks the 12th consecutive month this year in which total collections have exceeded the budgeted estimates. July sales tax collections represent consumer spending that took place in the month of June.
“We continue to believe the growth in sales and corporate tax collections indicates a very slow economic recovery in Tennessee, but we also continue to see mixed results at the national level,” Mr. Emkes said. “The latest published leading economic indicators show that the U.S. economy decelerated in the second quarter, which causes concern at the state level.
“We’ll close fiscal year 2012, which ended June 30, with a revenue surplus which will help maintain a balanced budget in fiscal 2012-2013.”
On an accrual basis, July is the twelfth month in the 2011-2012 fiscal year.
The general fund was over collected by $2.7 million, and the four other funds were over collected by $7.2 million.
Sales tax collections were $14.7 million more than the estimate for July. The July growth rate was 3.30%. For twelve months revenues are over collected by $241.8 million. The year-to-date growth rate for 12 months was positive 6.57%.
Franchise and excise taxes combined were $0.8 million under the budgeted estimate of $55.5 million. The growth rate for July was positive 8.64%. For twelve months revenues are over collected by $308.2 million and the year-to-date growth rate was positive 22.26%.
Inheritance and estate tax collections were $10.1 million below the July estimate. For 12 months collections are $37.9 million above the budgeted estimate.
Privilege tax collections were $1.1 million above the July budgeted estimate. For 12 months collections are $9.0 million more than the budgeted estimate, and the year-to date growth rate was positive 11.71%.
Business tax collections were $1.0 million less than the July estimate. Year-to-date collections for 11 months are $15.9 million below the budgeted estimate.
Tobacco tax collections were $2.6 million below the budgeted estimate of $25.9 million. For 12 months revenues are under collected by $18.5 million.
Gasoline and motor fuel tax collections for July were over collected by $3.4 million. For 12 months revenues are under collected by $5.1 million.
All other taxes for July were over collected by a net of $5.2 million.
Year-to-date collections for 12 months were $563.8 million more than the budgeted estimate. The general fund was over collected by $543.0 million and the four other funds were over collected by $20.8 million. The FY 2012 revised budget assumed an over collection of $209.6 million in General Fund Taxes. Therefore, the amount over collected above and beyond what’s already in the budget is $333.4 million ($543.0 million minus $209.6 million).
The budgeted revenue estimates for 2011-2012 are based on the State Funding Board’s consensus recommendation of April 15, 2011 and adopted by the first session of the 107th General Assembly in May. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.shtml.
The State Funding Board met on December 9th and 14th to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2011-2012. The revised ranges assume an over collection of $187.8 million to $220.5 million in total taxes and $177.0 million to $209.6 million in general fund taxes from the fiscal year 2011-2012 budgeted estimate. The revised estimates are reflected on pages A-74 and A-76 in the 2012-2013 Budget Document.
Year-to-date collections for 2011-2012 are subject to final accrual adjustments.