Tennessee revenues for December were $217.2 million more than budgeted and represented growth of nearly five percent over December 2021, according to Friday’s announcement by the state’s Commissioner of Finance and Administration Jim Bryson.
December is the fifth month, on an accrual basis, of the 2022-2023 fiscal year, and the year-to-date revenues are $959.9 billion over what was budgeted and $655 million over the same time last fiscal year.
The state’s top two revenue generators, sales tax, and the franchise and excise tax, accounted for $210 million or nearly 97 percent of the December surplus.
“December total tax collections represent the lowest monthly revenue growth for the current fiscal year to date,” Bryson said.
“Sales tax receipts, reflecting November retail sales activity, moderated significantly and correspond to the slowest rate of gain since September 2020 when it was 1.56 percent. While concerning, November’s modest sales tax growth was anticipated because of accelerated sales activity during this same time last year when supply chain disruptions altered purchasing behavior.”
“State corporate taxes, or franchise and excise taxes, made moderate gains for the month, but negative growth from tobacco taxes and privilege taxes diminished total tax proceeds,” said Bryson, with the diminished revenues of the five taxes totaling $10.5 million.
“All other taxes combined were nearly flat compared to December 2021, but they exceeded our monthly budget estimates,” Bryson also said.
For the month of December, the general fund is $198.9 million or 13 percent, over the budgeted estimate and $882.8 or 13.8 percent ahead for the year.
Meanwhile, the state’s other major fund, the Highway Fund, is $5.3 million or 7 percent of the budgeted estimate for December and $24.6 million or 6 percent ahead of the budgeted estimate for the fiscal year.
The General Fund is also $619.5 million or 9 percent ahead of this time last fiscal year, but the Highway Fund is $24 million or 5.5 percent behind last year to date.
The updated financials regarding the Highway Fund comes as Governor Bill Lee recently announced a proposal for $26 billion in funds additional to the 2017 fuel tax-increasing IMPROVE Act to address transportation needs across the state.
Like the U.S. Chamber of Commerce that is predicting a bumpy 2023 for the nation’s economy, Bryson alludes to preparing for adjustments through the end of the year.
“It is fully expected that revenue growth will continue to moderate over the foreseeable future,” Bryson said, “however, we must be cognizant that one month does not make a trend. As such, we will continue to closely monitor our revenues and expenditures throughout the remainder of this fiscal year.”
The state’s budgeted revenue estimates for the 2022-2023 fiscal year are based on the State Fund Board’s consensus recommendation from November 23, 2021. They include changes enacted during the 2022 legislative session adopted by the Tennessee General Assembly in April 2022. The estimates can be viewed here, and the combined revenue tables for December 2022 and the fiscal year-to-date can be viewed here.
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Laura Baigert is a senior reporter at The Star News Network, where she covers stories for The Tennessee Star.
Photo “Jim Bryson” by Tennessee Department of Finance & Administration. Background Photo “Tennessee State Capitol” by Carol M. Highsmith.
