In a news release Friday, the Commissioner of Finance and Administration Stuart McWhorter announced that the state’s revenues for October exceeded budgeted estimates, resulting in a $49.8 million surplus for the month.
October is the third month on an accrual basis in the 2020 fiscal year, and the cumulative surplus is now up to $217.4 million.
The revenues budgeted for October are the third lowest for the year, but still reflect growth of 7.88 percent over October 2019.
According to Commissioner McWhorter, “Growth over October revenue estimates were mainly supported by strong sales tax receipts and a large one-time motor fuel tax payment in the month.”
Gasoline and motor fuel revenues increased were $25.4 million more than the budgeted estimate of $104.7 million, approximately $23.3 million of which came from a one-time motor fuel tax payment related to a pending diesel fuel lawsuit, the news release said.
Meanwhile, Commissioner McWhorter said that the usually strong franchise and excise tax revenue “fell short of estimates.”
While the franchise and excise tax revenues were off by $14 million – more than 24 percent – for the month, year-to-date the revenue source is still up by greater than 18 percent.
Commissioner McWhorter reported that the shortfall was “due in part to a growth in corporate tax refunds over the prior year as corporate tax filers that requested an April extension balanced their estimated payment to their tax liabilities.”
As The Tennessee Star reported, in announcing the state’s September revenues Commissioner McWhorter was cautious about the franchise and excise tax revenues for October, anticipating impact from corporate reconciliations as to their tax obligations.
In addition to the franchise and excise tax, the state’s tobacco, motor vehicle title, alcoholic beverages and severance taxes were also off, but only by a total of $1.9 million.
Those shortfalls were more than offset by the state’s other tax revenues.
Most notably, the state’s primary revenue source – sales and use tax – was $26.6 million or 3.41 percent ahead of the budgeted estimate for the month.
The state’s General Fund is $172 million or 6 percent ahead of the budgeted estimates through the first quarter of 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 $45 million in total.
Commissioner McWhorter qualifies 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 October 2019 can be found here.
Laura Baigert is a senior reporter at The Tennessee Star.