Tennessee December revenues $2M over estimates

Tennessee Department of Finance and Administration Commissioner Jim Bryson announced today that revenues for December were higher than expected and exceeded the monthly revenues from the previous year.

State revenues for December were $2 billion or $217.2 million more than the budgeted estimate with growth of 4.96% from December 2021.

“December total tax collections represent the lowest monthly revenue growth for the current fiscal year to date,” Bryson said. “Sales tax receipts, reflecting November retail sales activity, moderated significantly and correspond to the slowest rate of gain since September 2020 when it was 1.56%. While concerning, November’s modest sales tax growth was anticipated because of accelerated sales activity during this same time last year when supply chain disruptions altered purchasing behavior. State corporate taxes, or franchise and excise taxes, made moderate gains for the month, but negative growth from tobacco taxes and privilege taxes diminished total tax proceeds. All other taxes combined were nearly flat compared to December 2021, but they exceeded our monthly budget estimates.

“It is fully expected that revenue growth will continue to moderate over the foreseeable future, however we must be cognizant that one month does not make a trend. As such, we will continue to closely monitor our revenues and expenditures throughout the remainder of this fiscal year.”

On an accrual basis, December is the fifth month in the 2022-2023 fiscal year.

General fund revenues were more than the budgeted estimates in the amount of $198.9 million and the four other funds that share in state tax revenues were $18.3 million more than the estimates.

Sales tax revenues were $118.8 million more than the estimate for December. The December growth rate was 5.64%. For the first five months of this fiscal year, revenues are $598.5 million higher than estimated, and the year-to-date growth rate is 9.53%.

Franchise and excise taxes combined were $91.7 million more than the December budgeted estimate. Year-to-date revenues exceed estimates in the amount of $316.2 million, or 13.04% more than the same period last year.

Gasoline and motor fuel revenues increased by 0.93% compared to last December and were $2 million more than the budgeted estimate of $104.5 million. For five months revenues are $3.3 million less than estimates.

Motor vehicle registration revenues were $3.2 million more than the December estimate and on a year-to-date basis they are $15.6 million more than estimates.

Tobacco tax revenues were $4.9 million less than the budgeted estimate of $20.3 million. For five months revenues are $5.4 million less than estimated.

Privilege tax revenues were $4.8 million less than the budgeted estimate of $39.4 million. Year- to-date revenues for five months are $16.9 million less than the budgeted estimate.

Business tax revenues were $0.5 million more than the December estimate and $13.5 million more than estimates on a year-to-date basis.

Mixed drink, or liquor-by-the-drink, taxes were $5.6 million more than the December estimate, and on a year-to-date basis, revenues are $26 million more than estimates.

All other taxes combined for December were $5.1 million more than estimated.

Year-to-date revenues for five months were $959.9 billion more than the budgeted estimate. The general fund recorded $882.8 billion in revenues more than estimates, and the four other funds recorded $77.1 million more than estimates.  Year-to-date growth for the first five months is 8.20%.

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.