Tennessee Department of Finance Releases May Revenues

Department of Finance and Administration Commissioner Stuart McWhorter today announced that overall May revenues were $1.2 billion, which is $46.3 million more than the state budgeted.

“Total reported revenues in May were more than estimated and demonstrated sound growth over this same time period last year,” McWhorter said. “Both sales tax and corporate tax revenues were the largest contributors to the month’s growth and taken together continued to outperform expectations, as they have for most of the year. All other tax revenues, taken as a group, were also more than the May estimates.

“With May revenues posting a notable gain compared to the budgeted estimate, the year-to-date revenue balance continues to advance. Nonetheless, we will continue to closely monitor collections for the last two remaining months of the fiscal year.”

On an accrual basis, May is the tenth month in the 2018-2019 fiscal year.

General fund revenues were more than the budgeted estimates in the amount of $41.8 million, while the four other funds that share in state tax revenues were $4.5 million more than the estimates.

Sales tax revenues were $34.2 million more than the estimate for May and they were 8.18 percent more than May 2018. May sales tax revenues reflect retail business activity that occurred in April. For ten months, revenues are $256.6 million higher than estimated. The year-to-date growth rate for ten months was 5.73 percent.

Franchise and excise tax revenues combined were $13.1 million higher than the budgeted estimate in May, and the growth rate compared to May 2018 was positive 14.93 percent.  For ten months, revenues are $183.5 million more than the estimate and the year-to-date growth rate is 6.65 percent.

Gasoline and motor fuel revenues for May increased by 6.57 percent compared to May 2018, and they matched the budgeted estimate of $97.5 million.  For ten months, revenues have exceeded estimates by $4.9 million.

Tobacco tax revenues were $1.0 million more than the May budgeted estimate of $21.3 million. For ten months, they are $6.2 million less than the budgeted estimate.

Hall income tax revenues for May were $3.7 million less than the budgeted estimate. For ten months, revenues are $43.8 million more than the budgeted estimate.

Privilege tax revenues were $5.9 million less than the May estimate, and on a year-to-date basis, August through May, revenues are $6.0 million more than the estimate.

Business tax revenues were $2.0 million more than the May estimate. For ten months, revenues are $25.1 million more than the budgeted estimate.

Motor vehicle registration revenues were $3.3 million more than the May estimate, and on a year-to-date basis, revenues are $23.2 million more than the estimate.

All other tax revenues exceeded estimates by a net of $2.3 million.

Year-to-date revenues for ten months were $556.7 million more than the budgeted estimate. The general fund recorded $504.2 million more than budgeted estimates and the four other funds $52.5 million.

The budgeted revenue estimates for 2018-2019 are based on the State Funding Board’s consensus recommendation of November 27, 2017 and adopted by the second session of the 110th General Assembly in May 2018. Also incorporated in the estimates are any changes in revenue enacted during the 2018 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 November 20, 2018 the Funding Board met to hear updated revenue projections from the state’s various economists.  On November 26, 2018 the board adopted revised recurring revenue growth ranges for the 2018-2019 fiscal year.  The current fiscal year’s revised ranges recognize recurring growth in total taxes from a low of 2.35 percent to a high of 3.25 percent, and a general fund growth from a low of 2.20 percent to a high of 3.20 percent.

On April 30, 2019 in the first session of the 111th General Assembly, the legislature passed the 2019-2020 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 17, 2019.

With the passage of the appropriations act, Public Chapter 405, the General Assembly recognized in the current fiscal year an additional $161 million in total revenue and a corresponding increase in general fund revenue in the amount of $119.1 million.