The report of Tennessee state revenues for September at $1.6 billion resulted in a budget surplus of $138.8 million.
Revenue for the month of September 2019, as indicated in the report, is $138.7 million more than September 2018, reflecting a 9.75 percent year-over-year growth rate.
On an accrual basis, September is the second month in the 2019-2020 fiscal year. Combined with August, the two months of revenues have resulted in a total $167.6 million budget surplus year-to-date.
Revenues are 6.6 percent ahead of the plan for the 2019-2020 fiscal year and 9.00 percent ahead of this time in the 2018-2019 fiscal year.
Finance and Administration Commissioner Stuart McWhorter said of the most recent month’s revenue results, “September sales tax receipts continue to reflect strong consumer activity within the state and corporate tax revenues greatly outperformed expectations.”
The sales and use tax, the state’s largest revenue generator accounting for more than 60 percent of the 2019-2020 budgeted revenues, exceeded the estimates for September by $31 million or nearly 4 percent. Year-to-date, sales tax revenues have exceeded the budgeted estimates by $40 million, or 2.5 percent for the two month period.
Franchise and excise taxes combined, the state’s second-largest revenue source at 17 percent of the annual budget, exceeded the September budgeted estimate by $96 million, equating to more than 24 percent ahead of plan. Year-to-date, franchise and excise taxes have exceeded the budgeted estimates by $103 million, or 24 percent for the two months.
Commissioner McWhorter, in his release of the positive September results, also had a note of caution, “While we are encouraged to see early monthly revenue receipts outpacing our estimates, we must be mindful that the coming month of October is when corporations reconcile their books relative to their actual tax obligation, and corporate calendar year filers who had a six month extension are allowed to request a refund.”
As McWhorter noted, “All other revenues combined also exceeded estimates for the month and have contributed to a strong start for the new 2019-2020 fiscal year.”
Other actual revenues that were ahead of the budget and contributing to the surplus were income, tobacco, motor vehicle registration, mixed drink, business, privilege, motor vehicle fuel, severance and coin-operated amusement taxes.
While the gasoline, beer, motor vehicle title, gross receipts and alcoholic beverage taxes were off by a combined $246,000 as compared to the budget, the shortfalls were more than offset by other tax collections in excess of the budget.
The state’s General Fund, which is where more than 80 percent of the state’s revenues flow in and out of, is $154.1 million or nearly 8 percent, ahead of the budgeted estimates two months into the fiscal year.
The state’s other four funds – Highway, Sinking, City & County and Earmarked Funds – are ahead of the fiscal year’s budgeted estimates by $13.5 million in total.
Commissioner McWhorter reminds Tennesseans in the revenue report release, “The budgeted revenue estimates for 2019-2020 are based on the State Funding Board’s consensus recommendation of November 26, 2018 and adopted by the first session of the 111th General Assembly in April 2019. Also incorporated in the estimates are any changes in revenue enacted during the 2019 session of the General Assembly.”
The state’s revenue estimates for the 2019-2020 fiscal year can be found here.
The state’s revenue report for September 2019 can be found here.