NASHVILLE – January 19, 2024 – Tennessee Department of Finance and Administration Commissioner Jim Bryson announced today that revenues for December were lower than expected and were less than the monthly revenues from the previous year. State revenues for December were $1.9 billion or $82.5 million less than the budgeted estimate declining 1.60 percent.
“Total revenues in December were lower than expected,” Bryson said. “Nevertheless, sales tax receipts, reflecting November consumer activity, rebounded nicely following the state’s three-month food sales tax holiday and suggests that consumer behavior remains resilient. Most of the revenue shortfall for the month can be attributed to reduced franchise and excise tax receipts and diminished revenues from real estate transaction fees, reported within the privilege tax. All other taxes combined revealed modest growth.
“Because of slowing tax collections, the administration plans to recommend a lowered revised revenue estimate for the current fiscal year. As such, we will continue to closely monitor state finances and remain committed to maintaining a balanced budget.”
On an accrual basis, December is the fifth month in the 2023-2024 fiscal year.
General fund revenues were less than the budgeted estimates in the amount of $81.4 million and the four other funds that share in state tax revenues were $1.1 million less than the estimates.
Sales tax revenues were $0.9 million less than the estimate for December. The December growth rate was 2.94 percent. For the first five months of this fiscal year, revenues are $14.1 million higher than estimated, and the year-to-date growth rate is 1.43 percent.
Franchise and excise taxes combined were $66.5 million less than the December budgeted estimate. Year-to-date revenues are less than estimates in the amount of $232.3 million, or 12.68 percent less than the same period last year.
Gasoline and motor fuel revenues decreased by 2.46 percent compared to last December and were $1.4 million less than the budgeted estimate of $105.2 million. For five months revenues are $2.3 million more than estimates.
Motor vehicle registration revenues were $0.1 million less than the December estimate and on a year-to-date basis revenues are $4.7 million less than estimates.
Tobacco tax revenues were $0.4 million less than the budgeted estimate of $18.1 million. For five months, revenues are $8.7 million less than estimated.
Privilege tax revenues were $12 million less than the budgeted estimate of $42.2 million. Year- to-date revenues for five months are $63.7 million less than the budgeted estimate.
Business tax revenues were $2.2 million less than the December estimate and $1.9 million less than estimates on a year-to-date basis.
Mixed drink, or liquor-by-the-drink, taxes were $0.8 million more than the December estimate, and on a year-to-date basis, revenues are $3.1 million more than estimates.
All other taxes combined for December were $0.2 million more than estimated.
Year-to-date revenues for five months were $279.9 million less than the budgeted estimate. The general fund recorded $283.6 million in revenues less than estimates, and the four other funds recorded $3.7 million more than estimates. Year-to-date growth for the first five months of the fiscal year is negative 1.39 percent.
The budgeted revenue estimates for 2023-2024 are based upon the State Funding Board’s consensus recommendation from November 28, 2022, and adopted by the first session of the 113th General Assembly in April 2023. Also incorporated in the estimates are any changes in revenue enacted during the 2023 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
