(The Center Square) – Tennessee remains $523.7 million short of the original budget for tax and fee collections through the first 10 months of the fiscal year.
The May numbers were $29.5 million short of the budgeted amount but $52.4 million head of May 2023.
The largest increase came in sales and use tax collection, which were nearly $1.2 billion in May and $38.8 million above a year before.
“Total tax revenues in May showed strong growth compared to the same time last year,” Tennessee Finance and Administration Commissioner Jim Bryson said. “Sales tax collections, which reflect taxable sales activity in April, were lower than original estimates but still increased significantly from May 2023.”
Tennessee adjusted its fiscal year tax collection projections by lowering the expectations by $798.4 million and budgeting based upon the lower total moving forward. The state also lowered its tax collection expectations for future fiscal years.
“Year-to-date, we are significantly below our original general fund budget estimate with two months remaining in the current fiscal year,” Bryson said. “However, with the support of the General Assembly, we passed a budget that reduced our current year’s general fund estimate and reset our recurring growth rate to zero percent year-over-year.
“As a result, we are on track to meet our revised estimated growth rates over the final two months of the fiscal year. In the meantime, we will continue to closely monitor tax collections and economic conditions to ensure fiscal stability.”
Privilege tax collections were $300,000 above the budgeted estimates but are $112.8 million below estimates for the fiscal year. Bryson noted that those increases reflect gains in realty transfer and mortgage tax activity.”
