Tennessee tax revenues plummet

NASHVILLE — The recession-induced free fall of Tennessee revenues continued last month as November tax collections plunged 13 percent below those of a year ago, officials said Wednesday.

Noting that November is the fourth consecutive month in which sales taxes and corporate income tax collections experienced “negative growth rates,” Finance Commissioner Dave Goetz said in a statement that “we are experiencing an historic revenue shortfall, but we will continue to keep the state’s budget in balance.”

November collections were $106.3 million less than the budgeted estimate. The general fund was $105.3 million under projections, while the four other funds were under collected by $900,000, officials said.

State sales tax collections were $53.6 million less than expected with a negative growth rate of 7.64 percent. Business franchise and excise taxes were $40 million below the budgeted estimate of $60.5 million, records show.

As a result, the current budget year shortfall now has ballooned to $324.1 million. The general fund shortfall now stands at $306.5 million, while other funds were under collected by $18.5 million.

Economist Alan Viard of the American Enterprise Institute, a conservative Washington-based research institution, said he thinks the current downturn will beat the 16-month recession of 1981-1982.

“It is likely this will be a more severe and longer depression than any of the ones since the Great Depression,” Dr. Viard noted, but he quickly added that it “won’t be nearly as long or severe.”