“May revenues exceeded the budgeted monthly estimate, and sales tax collections, fuel taxes, and business tax proceeds all continued to grow during the month,” said Bryson. “Corporate tax revenues, which are represented in franchise and excise taxes, were short of budgeted estimates, however they continue to show positive growth for the year. Because corporate tax revenues fluctuate more than other tax revenues, we will closely monitor these trends in the months ahead.
“Several state tax revenue sources saw positive growth compared to May of last year, however total revenues for the month were $18.6 million less than May 2022 and overall growth was negative 1.16 percent.”
On an accrual basis, May is the tenth month in the 2022-2023 fiscal year.
General fund revenues were $95.3 million more than the budgeted estimate while the four other funds that share in state tax revenues were $22 million more than the estimates.
Sales tax revenues were $112.1 million more than the estimate for May and 1.84 percent more than May 2022. For ten months, revenues are $1.2 billion higher than estimated. The year-to-date growth rate is 7.61 percent.
Franchise and excise tax revenues combined were $8.4 million less than the budgeted estimate in May and the growth rate compared to May 2022 was negative 23.83 percent. For ten months, revenues are $699.6 million more than the estimate and the year-to-date growth rate is 6.80 percent.
Gasoline and motor fuel revenues for May increased by 12.29 percent compared to May 2022 and they were $10 million more than the budgeted estimate of $103.5 million. For ten months, revenues are less than estimates by $2.5 million.
Motor vehicle registration revenues were $0.4 million less than the May estimate, and on a year-to-date basis, revenues are $32.1 million more than the estimate.
Tobacco tax revenues were $0.3 million less than the May budgeted estimate of $21.3 million. For ten months, they are $12.3 million less than the budgeted estimate.
Privilege tax revenues were $23.3 million less than the May estimate and decreased 34.39 percent from May 2022. On a year-to-date basis, August through May, revenues are $79.9 million less than the estimate.
Business tax revenues were $16.3 million more than the May estimate. For ten months, revenues are $73.9 million more than the budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $7 million more than the May estimate. For ten months, revenues are $56.2 million more than the budgeted estimate.
All other tax revenues were more than estimates by a net of $4.3 million.
Year-to-date revenues, for ten months, are $2 billion more than the budgeted estimate. The general fund recorded $1.8 billion more than the budgeted estimate and the four other funds were $173 million more than estimated.
The budgeted revenue estimates for 2022-2023 are based upon the State Funding Board’s consensus recommendation from November 23, 2021 and adopted by the second session of the 112th General Assembly in April 2022. Also incorporated in the estimates are any changes in revenue enacted during the 2022 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 21, 2022, the State Funding Board met again to hear updated revenue projections from various state economists. Following this meeting, on November 28, 2022, the board decided to adopt revised revenue growth ranges for the current fiscal year. The recurring growth ranges adopted include a low of 6.82 percent to a high of 7.27 percent for total taxes and a recurring range low of 7.20 percent to a high of 7.70 percent for general fund taxes.
On April 20, 2023, in the first session of the 113th General Assembly, the Legislature passed House Bill 1545/Senate Bill 1532, which included the Funding Board’s revised revenue ranges for the current year. Upon passage, an additional $2.7 billion ($2,711,200,000) in total funds and $2.6 billion ($2,588,600,000) in general fund revenue were added to this year’s original budgeted estimates. Public Chapter 418, known as the appropriations bill, was signed by Governor Lee on May 16, 2023.
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