by Jon Styf
Tennessee’s financial position improved again over the past year, as the state’s combined ending fund balance was $23.9 billion, up $4.8 billion from the year before in the recently released Annual Comprehensive Financial Report.
That’s after the state’s balances increased by $5.4 billion in the year that ended June 30, 2022.
Tennessee entered the 2023-24 financial year with a $20.5 billion spendable unrestricted fund balance available for spending at the government’s discretion or upon legislative approval. Of that, $1.8 billion was set aside for a rainy-day fund.
“The majority of this increase is derived from increases in cash and capital assets of $6.4 billion which is partially offset by a $1.7 billion increase in liabilities and a $1.6 billion decrease in deferred inflows of resources,” the report says.
The 281-page report notes, “[T]he largest portion of the state’s net position (56.9 percent) reflects its net investment in capital assets (e.g., land, infrastructure, structures and improvements, machinery and equipment, right-to-use assets, construction in progress and software in development), less any related debt and deferred outflows of resources used to acquire those assets that is still outstanding. The state uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the state’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the state’s net position (6 percent) is restricted and represents resources that are subject to either external restrictions or legislative restrictions on how they may be used. The remaining balance is unrestricted net position ($22.6 billion) and may be used to meet the state’s ongoing obligations to citizens and creditors not funded by resources that are restricted. Primarily as a result of near high operating grants and contributions, unrestricted net position increased by $6 billion (36.5 percent).”
Overall, Tennessee’s general obligation bonds and commercial paper debt went down $194.6 million during the financial year and now totals $1.6 billion.
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Jon Styf is a staff reporter at The Center Square.
Photo “Tennessee State Capitol” by Tennessee State Capitol.
