NASHVILLE – Tennessee Department of Finance and Administration Commissioner Jim Bryson today announced that Tennessee July revenues were $1.65 billion, which is $153.5 million more than the budgeted estimate and $46.3 million more than the state received in July 2022. The growth rate for July was 2.89 percent.
“July total tax revenues exceeded our budgeted estimates and grew at a modest pace compared to this same time last year,” Bryson said. “Monthly gains were led by sales tax receipts reflecting June consumer activity and corporate tax payments. When combined, all other tax revenues declined compared to July 2022.
“Annual revenues for fiscal year 2022-2023 exceeded our original budgeted estimates, but totals fell short of the funding board’s revised estimate from last fall. Although collections were lower, this presents no issue in closing the fiscal year. A combination of expenditure savings and unanticipated surpluses from other state revenue sources will balance the year. Any further concerns will be addressed in our next budget proposal.”
On an accrual basis, July is the final month in the 2022-2023 fiscal year. Final reported revenues will be subject to accrual accounting adjustments that may increase or decrease the recorded cash amounts on an audited basis.
General fund revenues were more than the budgeted estimates in the amount of $141.3 million and the four other funds that share in state tax revenues were $12.2 million more than the estimates.
Sales tax revenues were $129.3 million more than the estimate for July and 3.97 percent more than July 2022. For the year, revenues are $1.5 billion higher than estimated with an annual growth rate of 6.88 percent.
Franchise and excise tax revenues combined were $22.5 million greater than the budgeted estimate in July, and the growth rate compared to July 2022 was 14.49 percent. For the year, revenues are $849.7 million more than the estimate and the year-to-date growth rate is 6.10 percent.
Gasoline and motor fuel revenues for July decreased by 3.04 percent compared to July 2022 and were $5.1 million less than the budgeted estimate of $111.9 million. For the year, revenues are less than estimates by $9.1 million.
Motor vehicle registration revenues were $4.4 million more than the July estimate, and on a year-to-date basis, revenues are $39.5 million more than the estimate.
Tobacco tax revenues were $1.2 million less than the July budgeted estimate of $19 million. For the year, they are $16.7 million less than the budgeted estimate.
Privilege tax revenues were $11 million less than the July estimate, and on a year-to-date basis, August through July, revenues are $79.6 million less than the estimate.
Business tax revenues were $1.1 million more than the July estimate of $11.5 million. For the year, revenues are $75.3 million more than the budgeted estimate.
Mixed drink, or Liquor-by-the-drink, taxes were $6.4 million more than the July estimate. For the year, revenues are $68.5 million more than the budgeted estimate.
All other tax revenues were more than estimates by a net of $7.1 million.
For the year, revenues are $2.5 billion more than the budgeted estimate. The general fund recorded $2.3 billion more than the budgeted estimate and the four other funds were $201 million more than estimated.
The budgeted revenue estimates for 2022-2023 are based upon the State Funding Board’s consensus recommendation from November 23, 2021 and adopted by the second session of the 112th General Assembly in April 2022. Also incorporated in the estimates are any changes in revenue enacted during the 2022 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.
On November 21, 2022, the State Funding Board met again to hear updated revenue projections from various state economists. Following this meeting, on November 28, 2022, the board decided to adopt revised revenue growth ranges for the current fiscal year. The recurring growth ranges adopted include a low of 6.82 percent to a high of 7.27 percent for total taxes and a recurring range low of 7.20 percent to a high of 7.70 percent for general fund taxes.
On April 20, 2023, in the first session of the 113th General Assembly, the Legislature passed House Bill 1545/Senate Bill 1532, which included the Funding Board’s revised revenue ranges for the current year. Upon passage, an additional $2.7 billion ($2,711,200,000) in total funds and $2.6 billion ($2,588,600,000) in general fund revenue were added to this year’s original budgeted estimates. Public Chapter 418, known as the appropriations bill, was signed by Governor Lee on May 16, 2023.
