To listen to voices in the new Biden administration, one would think they are tasked with re-inventing the wheel to drag the United States out of the financial hole the coronavirus put it in.
The economic extent to which the nation already has recovered and the trajectory on which the previous administration put the country to grow when the pandemic is substantially over is a subject for another day.
But the state of Tennessee is fortunate that it doesn’t have to climb out of such a substantial hole. Indeed, consumer spending, and thus the state’s tax revenue, has so significantly exceeded expectations during the pandemic that Gov. Bill Lee may have upwards of $3 billion for the fiscal 2022 budget that he wasn’t expecting.
In June 2020, according to an analysis of state figures by the Sycamore Institute, an independent, nonpartisan public policy research center, the final budget projection for fiscal 2021 was that tax revenue would be down 2.8%. The July 1, 2020, official estimate was only minutely better. The range of the State Funding Board was slightly more positive, forecasting a gain anywhere from 1.5% to 1.8%.
However, General Fund collections for fiscal year 2021 already have outpaced official year-to-date estimates by $716 million just five months into the year. And, as of December, the actual trajectory for tax revenue was an increase of 5%. If that continues, it likely also would exceed the State Funding Board projection for fiscal 2022 of a gain between 2.7% and 3.2%.