The Commissioner of the Tennessee’s Department of Finance Administration Stuart McWhorter announced August 15 that, while state tax revenues were below budget for the month of July, Tennessee will end fiscal year 2019 with a surplus of $636.1 million.
On an accrual basis, July is the final month of the 2018-2019 fiscal year.
July 2019 revenues of $1.2 billion are $44.3 million – 3.94 percent – more than the state collected in July 2018, but $13.1 million – 1.11 percent – less than the budget for the month.
The state’s largest revenue source, sales and use tax, at $824.9 million was $6.1 million – 0.75 percent – over budget for July.
Other tax revenues that exceeded the budget for the month of July include the income tax, motor vehicle registration, mixed drink, business, privilege, and the TVA payment in lieu of taxes. Combined, the six revenue sources accounted for revenues of $6.4 million in excess of the July budget.
However, the franchise and excise tax was $12.7 million, or 14 percent, lower than budgeted for July.
Gasoline, special petroleum and motor vehicle fuel taxes were all off by a combined $6.8 million, as was tobacco by another $5 million.
For the 2018-2019 fiscal year, the $636.1 million budget surplus represents an excess of 4.3 percent in actual revenues over budget.
Compared to the 2017-2018 fiscal year, 2018-2019 revenues are $798.1 million – 5.46 percent – greater.
The franchise and excise tax as well as the sales and use tax combined for $514.8 – 81 percent – of the state’s $636.1 budget surplus for 2018-2019.
The other major revenue sources that contributed to the state’s budget surplus for 2018-2019, in descending order, are:
Income tax – $45 million or 28.6 percent over budget
Motor Vehicle Registration – $27 million or 8.6 percent over budget
Business Tax – $24 million or 13 percent over budget
Mixed Drink Tax – $13.6 million or 11 percent over budget
Privilege Tax – $11.7 million or 2.8 percent over budget
TVA Payment In Lieu of Taxes – $10.8 million or 3 percent over budget
Motor Vehicle Fuel – $3.4 million or 1.3 percent over budget
Revenue sources that did not meet expectations for the 2018-2019 fiscal year, in descending order, were:
Tobacco – $9.5 million or 3.8 percent below budget
Gasoline tax – $5.5 million or 0.65 percent below budget
Gross receipts tax – $1.6 million or 4.9 percent below budget
The budgeted revenue estimates for the 2018-2019 fiscal year were based on the November 2017 consensus recommendation of the State Funding Board and adopted by the 110th Tennessee General Assembly in May 2018.
The State Funding Board is responsible for developing the range of estimates for state revenues for the current and next fiscal year for presentation to the Governor and the Chairs of the Senate and House Finance, Ways and Means Committees.
The State Funding Board membership includes Governor Bill Lee, Comptroller Justin Wilson, Secretary of State Tre Hargett, Treasurer David Lillard and Commissioner of Finance and Administration Stuart McWhorter.
Commissioner McWhorter notes that even with the $161 million added to the projected revenues by the State Funding Board in November 2018, the state’s revenues will finish $475.1 more than the revised estimate for 2018-2019.
The announcement qualifies that reported revenues will be subject to final accrual adjustments that may increase or decrease the recorded cash amounts on an audited basis.
Laura Baigert is a senior reporter at The Tennessee Star.