Tennessee Department of Finance and Administration Commissioner Butch Eley announced Thursday that the state’s revenues for May were $1.6 billion or $432 million more than the budgeted monthly revenue.
Revenues for the ten-month period put the budget surplus at $2.4 billion for the 2020-2021 fiscal year.
Sales tax collections, the state’s primary source of revenue, continue to outperform budgeted estimates.
Not only did May sales tax revenues exceed those in COVID-impacted May 2020 by $587.3 million or 59.8 percent, they were well ahead of the previous May as well.
“When comparing May 2021 tax growth to May 2019, the monthly growth is 34.5 percent rather than the 59.8 percent growth over May 2020,” said Eley.
“Just as April tax revenue receipts revealed substantial growth, May state tax revenues continue to reflect extraordinary increases compared to this same time last year when most economic activity was weakened because of the pandemic.”
In May 2021 alone, sales tax revenues exceeded the budget estimate by $258 million or 33 percent with growth across all categories, with the exception of groceries and food stores which experienced a minor reduction, reported Eley.
The state’s corporate franchise and excise tax was $86 million or 164 percent ahead of the budget.
Income tax revenues, which Eley said were included in May’s report due to a filing extension, was $36 million or 931 percent over the budget. However, for the year, income tax collections are off by $22 million or 21 percent.
The privilege tax, contributing $29 million to the month’s surplus, was 43 percent over the budgeted estimate for the month.
The state’s gas and fuel tax collections for May were all ahead of the budget, which put the Highway Fund over the year-to-date budget by $12.6 million or 1.5 percent.
Inheritance and estate, tobacco, beer, mixed drink, alcoholic beverage, motor vehicle registration, motor vehicle title, business and coin-operated amusement tax revenues all exceeded the budget for May by a combined total of nearly $2 million.
Meanwhile, May’s TVA payments in lieu of taxes, the gross receipts and severance taxes were off for a combined one-month total of $2.5 million.
The state’s revenue collections through ten months of the fiscal year are $14.7 billion or $2.4 billion and 20 percent in excess of the budgeted $12.2 billion.
Eley offered a few words of caution about the outlook, “While the year-to-date revenue balance continues to advance, we will continue adhering to the conservative management of our budget as we approach the end of the fiscal year. We must continue to acknowledge the role that federal funds and inflation are playing in this already volatile economy.”
The revenue tables for May 2021 and the year-to-date can be viewed here.
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Laura Baigert is a senior reporter with The Star News Network, where she covers stories for The Tennessee Star and The Georgia Star News.