NASHVILLE, Tenn. (AP) — Tennessee’s tax collections have fallen short of projections in the first month of the budget year.
Finance Commissioner Mark Emkes said in a release Friday that the weak revenues reflect a slow economic recovery on the national level.
The state’s total general fund collections for August were $660 million, or about $6 million less than budgeted. The August collections reflect economic activity in the previous month.
Sales taxes grew by just 1.1 percent during the month to $569 million, or nearly $16 million below expectations. But corporate franchise and excise taxes beat projections by $5 million.
Sales tax collections posted a 6.6 percent annual growth rate in the budget year that ended June 30, while corporate taxes grew by 22 percent.
Note: The news release is below.
News release from Department of Finance and Administration:
NASHVILLE – Tennessee revenue collections fell short of budgeted estimates for the first month of the state’s fiscal year. Finance and Administration Commissioner Mark Emkes today reported that overall August revenues were $814.8 million, which is only 1.01% above August 2011 collections.
“We’ve been concerned about the very slow recovery on the national economic level, and August collections in Tennessee unfortunately confirm those fears,” Emkes said. “Sales tax collections for the last two consecutive months were somewhat weak, but corporate tax collections continued to record respectable growth, all of which kept us above the budgeted estimate before August.
“In light of what the leading indicators are suggesting and federal budget uncertainties, we will continue monitoring the state’s spending and revenue patterns as we begin preparations for the 2014 budget.”
On an accrual basis, August is the first month in the 2012-2013 fiscal year.
August collections were $13.8 million less than the budgeted estimate. The general fund was under collected by $6.3 million and the four other funds were under collected by $7.5 million.
Sales tax collections were $15.7 million less than the estimate for August. The August growth rate was positive 1.13%.
Franchise and excise taxes combined were $5.1 million above the budgeted estimate of $30.3 million.
Gasoline and motor fuel collections decreased by 8.30% from August of 2011, and were $6.7 million below the budgeted estimate of $73.8 million.
Inheritance tax collections were $4.7 million above the budgeted estimate.
Privilege tax collections were $0.6 million less than the budgeted estimate of $16.4 million
Business tax collections were $0.8 million above the August estimate.
Tobacco tax collections for the month were over collected by $0.9 million.
All other taxes were under collected by a net of $2.3 million.
The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.