News release from state Department of Finance and Administration:
NASHVILLE – Tennessee revenue collections recorded negative growth in May, largely due to a legal change in the timing of business tax payments.
Finance and Administration Commissioner Larry Martin reported today that May ended with a net negative growth of 2.96% over collections made in the same month last year. Overall May revenues were $878.6 million, which is $40.0 million less than the state budgeted. May sales tax collections reflect business activity that occurred during April.
“May collections were significantly skewed due to the business tax change, along with the payment of a large sales tax settlement,” Martin said. “Tennessee’s sales tax collections continue to reflect a slow recovery from the recession, and require us to closely monitor collections and expenditures for the remainder of this year to end with a balanced budget.”
On an accrual basis, May is the tenth month in the 2013-2014 fiscal year.
The general fund was under collected by $42.0 million, and the four other funds were over collected by $2.0 million.
Sales tax collections were $10.5 million less than the budgeted estimate for May. The May growth rate was positive 0.93%. For ten months revenues are under collected by $29.1 million. The year-to-date growth rate for ten months was positive 3.36%.
Franchise and excise taxes combined were $2.2 million below the budgeted estimate of $48.7 million. For ten months revenues are $224.2 million less than the budgeted estimate.
Inheritance and estate tax collections were $1.5 million above the May estimate. For ten months collections are $20.6 million above the budgeted estimate.
Privilege tax collections were $3.7 million less than the May budgeted estimate, and for ten months collections are $14.1 million below the budgeted estimate.
Gasoline and motor fuel collections for May increased by 8.33% and were $3.0 million more than the budgeted estimate. For ten months revenues are positive 0.85% and $1.6 million above the budgeted estimate of $688.2 million.
Business tax collections were $28.5 million less than the May estimate, and year-to-date collections for ten months are $1.2 million below the budgeted estimate.
Tobacco tax collections were $0.4 million above the budgeted estimate of $21.2 million. For ten months revenues are under collected in the amount of $6.7 million.
All other taxes in total were equal to the budgeted estimates for May.
Year-to-date collections for ten months were $222.3 million less than the budgeted estimate. The general fund was under collected by $236.0 million and the four other funds were over collected by $13.7 million.
The budgeted revenue estimates for 2013-2014 are based on the State Funding Board’s consensus recommendation of December 19th, 2012 and adopted by the first session of the 108th General Assembly in April 2013. They are available on the state’s website at http://www.tn.gov/finance/bud/Revenues.shtml.
The Funding Board met on December 10, 2013 to hear updated revenue projections from the state’s various economists. The board met again on December 17 and adopted revised revenue ranges for 2013-2014. The revised ranges assume an under collection from the July 2013 budgeted estimate in the amount of $111.2 million to $134.5 million in total taxes and in the amount of $126.1 million to $145.6 million in general fund taxes for the current fiscal year.