With One Month Remaining in the Fiscal Year, Tennessee’s Budget Surplus Is Now Up To $649 Million

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Department of Finance and Administration Commissioner Stuart McWhorter announced Wednesday that Tennessee’s June revenues were $92.5 million more than the state budgeted for the month, resulting in a total budget surplus of $649.2 million with just one month remaining in the 2018-2019 fiscal year.

The state’s revenue collections of $1.6 billion for the month of June, which is the eleventh month of the year on an accrual basis, were $115.3 million more than collected in June of 2018.

McWhorter acknowledged that total revenues in June “were notably higher than expected,” which confirms the strength of the Tennessee economy, he said.

Revenues have exceeded the budgeted estimates all 11 months of the current fiscal year, with surpluses ranging from a low of $3.2 million in October 2018 to the high of $258.9 million in April 2019. April’s excess revenues alone account for nearly 40 percent of the year-to-date budget surplus.

June’s surplus puts revenues to the state 4.8 percent ahead of the budget and 5.6 percent ahead of this time last fiscal year.

The Franchise and Excise Tax plus the Sales and Use Tax make up about 80 percent of the State’s total revenues as well as the budget surplus in terms of actual dollars.

Meanwhile, by percentage, the Coin-Operated Amusement, Income, Business and Mixed Drink taxes were the most over budget at 71, 28, 13 and 11 percent, respectively.

The major tax categories contributing to Tennessee’s $649.2 million year-to-date surplus are:

Sales & Use – $292 million or 3.5 percent over budget
Franchise & Excise – $229 million or 9.4 percent over budget
Income – $44 million or 28 percent over budget
Motor Vehicle Registration – $27 million or 9.3 percent over budget
Business – $23 million or 13.4 percent over budget
Mixed Drink – $11.8 million or 10.6 percent over budget

The tax revenues for gasoline and diesel continue to grow beyond the budgeted estimates as a result of the passage of the fuel-tax increasing IMPROVE – Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy – Act in 2017.

Gas tax revenues are up over the budget by a half million dollars and diesel up $3.67 million or 1.6 percent for the 11 months in the current budget year.

Fuel taxes increased once again on July 1, 2019, with gasoline going up another $0.01 per gallon and diesel by an additional $0.03 per gallon. July 1, 2019 marked the third installment on the fuel tax increases, which went up by a total of $0.06 on gas and $0.10 on diesel in accordance with the mandates in the 2017 IMPROVE Act.

The impact of the recent fuel tax increases will be reported in September.

Tax revenues for fiscal year 2018-2019 were down for the state in just five categories, putting them off the budgeted estimates by a total of $6.5 million:

Tobacco – $4.5 million or -1.96 percent
Gross Receipts – $1.2 million or –8.6 percent
Motor Vehicle Title – $448,000 or -2 percent
Beer – $251,000 or -1.5 percent
Severance – $71,000 or -7 percent

The budgeted revenue estimates for fiscal year 2018-2019 were based on the State Funding Board’s consensus recommendation in November 2017 and adopted in May 2018 by the second session of the 110th Tennessee General Assembly.

The 111th General Assembly passed Governor Bill Lee’s first budget for the upcoming 2019-2020 fiscal year on April 30 which was then signed by the Governor on May 17, 2019.

With the Legislature’s passage of the appropriations act, $161 million in budget surplus was recognized from the current fiscal year, according to the press release.

McWhorter, as a Gov. Lee appointee serving in his first year as Department of Finance and Administration Commissioner, concludes in his announcement, “With one revenue reporting month remaining in the 2018-2019 fiscal year, the state should outperform the revenue estimates for the year.”

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Laura Baigert is a senior reporter at The Tennessee Star.
Photo “Tennessee Capitol” by F McGady. CC BY-SA 4.0.

 

 

 

 

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7 Thoughts to “With One Month Remaining in the Fiscal Year, Tennessee’s Budget Surplus Is Now Up To $649 Million”

  1. William R. Delzell

    Wait a minute! If the state of Tennessee is in the black, then how can Metro Nashville be in the red, unless the State Legislature is trying to financially sabotage Nashville and other major urban areas of the state?

  2. Dal

    Time for Tennessee Taxpayer Relief.

  3. Thia

    Having just relocated to the Greater Nashville area, I must say that your roads and highways SUCK! You need to invest your “harvest monies” into roadway repairs; highways being extended and repaired, and for the off-roads…traffic lights installed and shoulders built. I watch daily as drivers have no access to off ramps for 20–30 minutes waiting for traffic to clear just to get off an exit ..usually taking a “chance” and dodging traffic just to get off the exit . You are well aware that your city, as well as surrounding areas, are growing exponentially because multi-family development permits are being issued daily (without review of impact) for large developments to build housing for the influx. Everyone’s in a rush to get to work or get home…I get it…but for major thoroughfares, this is just ridiculous. Are the Civil Engineers just stumped? Do they know how to conduct impact studies and report constructively to your townships? Or is it, in fact, just about the funding received that obviously gets banked? Traffic surveys exist for a reason! Perhaps you should take heed and be accountable for presenting a feasible plan and maybe the local governments should be addressing the situation. How about reaching out to other cities who’ve experienced excessive growth to see how they’ve addressed such a scenario? (Atlanta??)

    Lastly…
    Your gas prices are outrageous and indicative of gas price gouging. How is this justifiable? Tennessee makes a large amount of money with annual vehicle inspections and registrations. Perhaps you should focus on things such as cracked windshields that deter a driver’s vision, and step up on traffic laws to ensure those crazy drivers that cause accidents by speeding 90 miles an hour and cutting off other drivers by weaving in and out of traffic are dealt with.

    Don’t know if I’ll make it past a year, but I’d hate to leave this beautiful landscape for greed just to say “we have a surplus.”

  4. akaMOTU

    So… the ex guvner and the State RINO’s stuck it to us on the gasoline tax hike – ostensibly to fix our highways. WHEN will the State BEGIN fixing our highways? I-40 NEEDS to be 6 lanes from end to end. GA increased I-75 to 6 lanes YEARS ago. While you’re at it, HIRE the construction companies that GA uses – they are at least TWICE as fast as the construction companies that TN hires.

    Otherwise, REPEAL the bogus gas tax increase.

  5. Cannoneer2

    Repeal the gas tax!

  6. Mary

    Repeal the gas tax!

    1. 83ragtop50

      I loudly second that!!
      What a rip off and slap in the taxpayers’ faces.

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