posted September 13, 2002
New revenue data just released by the Tennessee Department of Finance and Administration indicates strong revenue collection in August - but the F&A press release continues the Sundquist Administration's ongoing strategy of putting the worst possible face on good numbers.
Powered by a rebounding economy and the tax rate increase, overall revenue was up 9.22 percent compared to August 2001. So you would think the tone of the latest monthly press release announcing revenue totals would be buoyant. And you'd be wrong.
F&A's monthly revenue press releases typically describe revenue growth in terms of the percentage increase or decrease compared to the "budgeted estimate." But the latest report, which covers revenue collected in August, leaves out the percentage figure.
Why? Because revenue is less than a percentage point off the "budgeted estimate." In other words, it is statistically within the margin of error. The new fiscal year - August revenue is the first revenue for the fiscal year - has started without a meaningful shortfall.
But that's not what the Sundquist administration wants you to think. They intend to maintain the budget crisis fiction through the end of Sundquist's term. The alternative, admitting the recent shortfalls have been caused by over-spending, is unthinkable to them.
So the press release focuses on tax collections being below the budgeted estimate by a certain dollar figure, $3.6 million, because that sounds worse than the percentage: 0.61%.
The press release notes that sales tax collections were $4 million below the estimate, but when adjusted for the tax rate increase and the change in the cap on taxes on large purchases, "there was not growth in sales tax collections for the month."
Revenue from the franchise & excise, gasoline and inheritance taxes - all showed growth above the budgeted estimate.
But here again the press release deliberately obscures the strong growth in revenue from those taxes, focusing on dollar amounts of growth compared to the budgeted estimate, rather than percentage growth over last August. Compared to August 2001, Inheritance tax revenue nearly doubled. F&E taxes were up 20 percent, and gasoline tax revenue rose 7 percent, two solid indicators of a rebounding economy.
Sales tax collections were up 10.5 percent - but that increase includes the tax rate increase.
I've asked F&A for details on sales tax revenue to determine how much of the revenue reflects the sales tax rate increase, in order to provide an apples-to-apples comparison to August 2001 sales tax revenue. When that information is received, I'll post it here as an update at the bottom of this item.
We'll also be watching to see if the mainstream newspapers explore the numbers in depth or merely regurgitate the heavily spun and factually incomplete press release from the Sundquist Administration.
Bill Hobbs
Nashville
http://www.hobbsonline.blogspot.com
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