Department of Finance and Administration Commissioner Larry Martin Wednesday announced that overall May revenues were $1.1 billion, which is $13.1 million more than the state budgeted.
“Total reported revenues in May reflect an increase compared to this time last year, but were very near the estimates for the month,” Commissioner Martin said. “Sales tax and franchise and excise tax revenues, the state’s largest tax revenue sources, exhibited growth compared to last year, but were slightly less than their budgeted estimates. Most of the month’s growth over the budgeted estimate came primarily from two sources - the Hall tax and motor vehicle registration receipts. All other tax revenues, taken as a group, were less than the May estimates.
“With May revenues posting little gain compared to the budgeted estimate, year-to-date revenues made only a small advancement compared to last month. Nonetheless, as we near the end of the fiscal year, we are optimistic state revenues will exceed estimates at the end of the fiscal year.”
General fund revenues were more than the budgeted estimates in the amount of $6.2 million, while the four other funds that share in state tax revenues were $6.9 million more than the estimates.
Sales tax revenues were $2.1 million less than the estimate for May and they were 0.42 percent more than May 2017. May sales tax revenues reflect retail business activity that occurred in April. For 10 months, revenues are $67.5 million higher than estimated. The year-to-date growth rate for ten months was 4.24 percent.
Franchise and excise tax revenues combined were $0.3 million lower than the budgeted estimate in May, and the growth rate compared to May 2017 was positive 12.81 percent. For 10 months, revenues are $171.2 million more than the estimate and the year-to-date growth rate is negative 0.93 percent. However, adjusting for the one-time payments received last fiscal year and this fiscal year produces a positive year-to-date underlying growth rate of 5.87 percent.
Gasoline and motor fuel revenues for May increased by 14.39 percent compared to May 2017, and they were $1.6 million less than the budgeted estimate of $93.1 million. For 10 months, revenues have exceeded estimates by $7.0 million.
Tobacco tax revenues were $0.7 million less than the May budgeted estimate of $21.5 million. For 10 months, they are $8.6 million less than the budgeted estimate.
Inheritance and estate tax revenues were $0.1 million less than the May estimate. On a year-to-date basis revenues for 10 months are $3.0 million less than the budgeted estimate.
Hall income tax revenues for May were $11.5 million more than the budgeted estimate. For 10 months, revenues are $29.0 million more than the budgeted estimate.
Privilege tax revenues were $1.2 million more than the May estimate, and on a year-to-date basis, August through May, revenues are $21.3 million more than the estimate.
Business tax revenues were $1.0 million less than the May estimate. For 10 months, revenues are $14.9 million more than the budgeted estimate.
Motor vehicle registration revenues were $5.9 million more than the May estimate, and on a year-to-date basis, revenues are $21.8 million more than the estimate.
All other tax revenues exceeded estimates by a net of $0.3 million.
Year-to-date revenues for 10 months were $321.1 million more than the budgeted estimate. The general fund recorded $276.4 million more than budgeted estimates and the four other funds $44.7 million.
The budgeted revenue estimates for 2017-2018 are based on the State Funding Board’s consensus recommendation of Nov. 29, 2016 and adopted by the first session of the 110th General Assembly in May 2017. Also incorporated in the estimates are any changes in revenue enacted during the 2017 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
On Nov. 20, 2017 the Funding Board met to hear updated revenue projections from the state’s various economists. On Nov. 27, 2017 the board adopted revised recurring revenue growth ranges for the 2017-2018 fiscal year. The current fiscal year’s revised ranges recognize growth in total taxes from a low of 2.43 percent to a high of 2.67 percent, and a general fund growth from a low of 1.16 percent to a high of 1.40 percent.
On April 19, in the second session of the 110th General Assembly, the legislature passed the 2018-2019 budget, which included the Funding Board’s current year revised ranges and also the administration’s amendment to the proposed budget. The governor signed the budget bill on May 21.
With the passage of the appropriations act, Public Chapter 1061, the General Assembly recognized in the current fiscal year an additional $49.7 million in total revenue and a corresponding increase in general fund revenue in the amount of $27.8 million.