NASHVILLE — Tennessee tax collections exceeded revenue estimates by $46.3 million in May, adding yet again to the state’s total surplus of one-time money that was already at just over a half billion dollars.
Ten months into Tennessee’s current Fiscal Year 2019, year-to-date revenues across all fund funds are now $556.7 million over original budgeted estimates when the state’s annual spending plan was enacted in 2018, according to the Lee administration.
State Finance and Administration Commissioner Stuart McWhorter said in a news release that total reported revenues in May “were more than estimated and demonstrated sound growth over this same time period last year.”
The state’s general fund, which funds most areas of government including education, brought in $504.2 million more during the first 10 months of the fiscal year than budgeted estimates while the four other funds exceeded estimates by $52.5 million.
Both sales tax and corporate tax revenues were the biggest contributors to revenue growth in May and “taken together continued to outperform expectations, as they have for most of the year,” McWhorter said.
General fund revenues in May exceeded budgeted estimates in May by $41.8 million. The four other funds, including transportation, were $4.5 million over estimates.
Sales tax revenues in May, which reflect April activity, were $34.2 million more than estimates for this year and represent an 8.18% increase over May 2018. Over the past 10 months, sales tax revenues are collectively $256.6 million higher than estimates.
Year-to-date sales tax growth was 5.73%, a key data point with sales taxes being the main funding source for Tennessee government.
Business franchise and excise tax revenues combined were $13.1 million higher in May than budgeted estimates. The year-to-date growth rate is 6.65% while the rate compared to May 2018 was 14.93%.
For ten months, franchise and excise tax revenues are $183.5 million more than estimates.
Gasoline and motor fuel revenues for May, meanwhile, increased by 6.57 percent compared to May 2018, and they matched the budgeted estimate of $97.5 million. For ten months, revenues have exceeded estimates by $4.9 million.
Revenues for the Hall income tax — tax is in the process of being phased out — were $3.7 million less than the budgeted estimate in May. For ten months, revenues are $43.8 million more than the budgeted estimate.
But privilege tax revenues were $5.9 million less than the May estimate, although on a year-to-date basis, August through May, revenues are $6.0 million more than the estimate.
Other business tax revenues were $2.0 million more than the May estimate. For ten months, revenues are $25.1 million more than the estimate.
Motor vehicle registration revenues, meanwhile, were $3.3 million more than the May estimate, and on a year-to-date basis, revenues are $23.2 million more than the estimate.
When passing the Republican Gov. Bill Lee’s first annual spending earlier this year, the General Assembly recognized $161 million in total new revenue for the current fiscal year. But the remaining money wasn’t due to concerns it would “bust” the Copeland “cap,” a spending limitation law enacted under the leadership of late state Rep. David Copeland, R-Ooltewah.
When the money is recognized, it will be as one-time funds which are often used for building projects. But the one-time revenues have also been used to boost the state’s “Rainy Day” emergency reserve fund.
For example, when passing the state’s new Fiscal Year 2020 budget that takes effect July 1, Lee and state lawmakers put another $239 million of one-time money into the Rainy Day fund, bringing reserves to $1.1 billion.
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on Twitter @AndySher1.