Larry B. MartinNASHVILLE - Tennessee tax collections in January roared past projections by $219.5 million in January, fueled by better-than-expected consumer holiday spending, low gas prices and corporate earnings, according to officials.
It was the best showing in nearly three years.
"January sales tax collections, reflecting consumer spending that occurred during December, posted the largest monthly growth rate we've experienced for the past 33 months, and we recorded our strongest second quarter growth since 2006," said state Finance Commissioner Larry Martin in a news release.
Martin said he believes growth "was heavily influenced by several factors, including aggressive holiday retail marketing, continued reduction in the unemployment rate, lower gasoline prices, and an overall improving economy."
Overall January collections were $1.3 billion.
Year-to-date collections for the first six months of Fiscal Year 2015 are now $343.9 million above budgeted estimate. The general fund, which pays for most state functions, exceeded estimates by $323.4 million while the four other funds are running $20.5 million above projections.
In January, revenues exceeded projections by $214.1 million. The four other funds were "over collected "by $5.4 million.
Sales tax collections were $34.2 million more than January estimates. The growth rate hit 7.8 percent.
The state's two major business levies, the franchise and excise taxes collectively soared in January by $171.4 million more than the budgeted estimate of $151.9 million.
Corporate tax collections are often unpredictable. Last year, a $300 million loss put the budget out of whack and forced Gov. Bill Haslam to kill a planned pay raise for teachers and state employees.
"It's important to note that all corporate payments, including one-time payments, are received throughout the year based on estimates, and reconciled at a later point with their final corporate filings," Martin cautioned. "Although good news, one-time payments, when identified, are separated from our recurring tax base and used only to support one-time expenditures and uses."