NASHVILLE — Tennessee general fund revenues in March fell nearly 8 percent or $71.91 million below projections in March, but Finance Commissioner Larry Martin isn't ready to hit the panic button, at least not yet.
Martin said in a news release that while the state's sales tax, a primary support of the general fund, fell 7.48 percent, or $48.1 million, below expectations in February, it's "due in part to having one less day of retail activity this February compared to February 2016 and also growing over an extraordinarily high base from last year."
Moreover, Martin said, the Tennessee Department of Revenue implemented a new tax administration system this month and extended the sales tax filing deadline.
"The April report should capture any March outstanding liability taxpayers owe," Martin added.
March sales tax collections generally reflect February purchases.
Total March revenues, which include non-general fund revenues such as fuel taxes, were $993.6 million or $100.9 million less what was collected in March 2016 and $70.1 million less than the budgeted estimate for the month.facebook
Besides the general fund, four other funds that share in state tax revenues, including fuel taxes, collectively came in at $1.4 million more than estimates.
Gas and fuel revenues for March increased by 4.55 percent over March 2016 and were $5.1 million more than the budgeted estimate of $61.2 million. For eight months fuel tax revenues have exceeded estimates by $31.6 million.
Overall, the state's budget continues to run a huge, nearly half-billion-dollar surplus for the fiscal year, which began last July 1. Year-to-date revenues for the eight-month period through March were $475.5 million more than budgeted estimates. The growth rate for eight months was 4 percent.
The general fund recorded $419.8 million above budgeted estimates while the four other funds, including fuel taxes, ran $55.7 million above state funding board projections.
Sales taxes weren't the only taxes down in March. Martin said Tennessee's corporate franchise tax also recorded "negative growth" — state budget bureaucratese for falling below projections.
"Franchise and excise tax recorded negative growth for March and were also below the monthly budgeted estimate," Martin said. "All other revenues combined marginally exceeded the March estimate."
Corporate taxes fell 9.42 percent, or $20.7 million, below the $220.4 million projection. Still, the tax is notoriously volatile. Republican Gov. Bill Haslam, meanwhile, intends to reduce the tax by $113 million annually to benefit corporate manufacturers under his IMPROVE Act for roads that was up for final action late Monday on the House floor.
At the national level, there have been concerns over auto sales, a major driver of sales taxes. They fell during the first quarter of 2017, but the blow was considerably softened by an upswing in sales of trucks and SUVs, according to Bloomberg News.
But there are concerns that the auto decline occurred despite larger buyer incentives with a decrease in subprime auto loans.
Contact Andy Sher at firstname.lastname@example.org or 615-255-0550.
This story was updated April 24 at 11:35 p.m.