Nearing the end of state government’s fiscal year, Tennessee has collected nearly one half billion dollars more than expected, according to state officials.
Revenues totaled $974 million for May, when $50.5 million more than expected pouring into state coffers. Overall, the state has collected $495 million more than anticipated in the first 10 months of the budget year, with $452 million overcollected for the general fund, according to the Department of Finance and Administration.
“May collections recorded significant gains in sales tax revenues as well as corporate tax payments,” said Larry Martin, commissioner of the department, in a press release. “All other taxes, in total, showed marked improvement over collections of one year ago and were more than the budgeted estimates for May.”
The state collected $20.5 million extra in sales tax last month, a growth rate of about 9 percent, according to the agency. Franchise and excise taxes combined totaled $16 million more than the $50 million the state expected.
The only major taxes that came in below expectations last month were the inheritance and estate tax and the tobacco tax, which fell about $1 million and $500,000 short, respectively.
Tennessee government collected $90 million more than it expected to last month largely thanks to growth in franchise and excise taxes which help make up the "bread and butter" of the state's revenues, said the state Office of Finance and Administration.
“The significant improvement in April taxes reflects an increase primarily in franchise and excise taxes, and we also saw moderate growth in sales tax receipts which indicates increased consumer confidence,” said Larry Martin, Finance and Administration commissioner.
Combined, franchise and excise tax collections amounted to $73.3 million more than the state’s budgeted estimate, for a growth rate of more than 12 percent over last year. Accounting for an unexpected dip in revenues last year due to two one-time tax payments, franchise and excise taxes are up about 10 percent over last year.
Sales taxes climbed $12.2 million above expectations and 5.6 percent over this time last year. Other taxes topping expectations last month include privilege taxes, Hall income taxes and tobacco taxes. Inheritance and estate tax collections, business taxes, gasoline and motor fuel collections all fell below expectations.
Year to date nine months into the fiscal year, state revenues are $444 million more than anticipated.
A week after a handful of school districts sued the state over education funding, the governor found about $29 million to begin shoring up teacher health insurance costs.
The boost stretches the state's contribution of health insurance costs to 11 months, up from 10 months. According to the Basic Education Program Review Committee, the state should be providing its share of health insurance costs for 12 months.
"This is a good faith effort to try to move in the right direction. It doesn't mean we'll be able to do the twelfth month next year but at least we hope to get the eleventh," Larry Martin, commissioner of the Department of Finance & Administration, told Pith.
Taxes collected in May fell both below expectations and 2.96 percent below last May's revenues, according to the Department of Finance and Administration. The undercollection puts the state almost a quarter of $1 billion dollars below expectations 10 months into the year. More on that here.
State tax revenue collections in March released today reflect mixed results, with the general fund under collected by more than $4 million for the month and by $263.9 million year-to-date, according to the Tennessee Department of Finance and Administration.
Total tax collections for the month were 2.10 percent above the March 2013 figure.
The numbers arrive as members of the Tennessee General Assembly are concluding their session amid sometimes-heated discussions about spending.
“March collections continued to reflect weaker than anticipated revenues from the corporate sector, while sales tax collections were stronger,” Larry Martin (pictured), finance and administration commissioner, said in a release. “We believe the recent increase in retail spending is a reflection of renewed consumer confidence and indicates that the economy is slowly recovering. This growth is important in meeting current revenue projections on which the approved budget amendment was based.
“About a fourth of our corporate income taxes often — but not always — occur in the month of April,” Martin added. “We will work with the legislature and others to manage the state’s spending and resources regardless of the economic climate, as the state has always done.”
On an accrual basis, March is the eighth month in the 2013-14 fiscal year.
Sales tax collections were $9.4 million more than the estimate for March. The March growth rate was positive 5.51 percent. For eight months, revenues are under collected by $23.4 million. The year-to-date growth rate for eight months was positive 3.58%.
Franchise and excise taxes combined were $11.7 million below the budgeted estimate of $199.9 million. For eight months, revenues are under collected by $227 million. The year-to-date growth rate for eight months was negative 13.51 percent.
Gasoline and motor fuel collections for March increased by 11.78 percent and were $7.4 million above the budgeted estimate. For eight months, revenues are over collected by $3.1 million.
Tobacco taxes collections were $4.6 million under the budgeted estimate of $23.6 million. For eight months, revenues are under collected in the amount of $6.9 million.
Inheritance and estate taxes were over collected by $0.4 million for the month. Year-to-date collections for eight months are $17.6 million more than the budgeted estimate.
Privilege tax collections were $33,000 less than the March estimate, and on a year-to-date basis, August through March, collections are $7 million below the estimate.
Business tax collections were $3.7 million above the March estimate.
All other taxes were under collected by a net of $1.8 million.
Year-to-date collections for seven months were $257 million less than the budgeted estimate. The general fund was under collected by $263.9 million and the four other funds were over collected by $6.9 million.
The budgeted revenue estimates for 2013-2014 are based on the State Funding Board’s consensus recommendation of Dec. 19, 2012 and adopted by the first session of the 108th General Assembly in April 2013. They are available on the state’s website athttp://www.tn.gov/finance/bud/Revenues.shtml.
The Funding Board met on Dec. 10, 2013 to hear updated revenue projections from the state’s various economists. The board met again on Dec. 17 and adopted revised revenue ranges for 2013-14. The revised ranges assume an under collection from the July 2013 budgeted estimate in the amount of $111.2 million to $134.5 million in total taxes and in the amount of $126.1 million to $145.6 million in general fund taxes for the current fiscal year.
The governor has dropped the interim tag from former First Tennessee executive Larry Martin's business card:
Tennessee Gov. Bill Haslam today announced Larry Martin as commissioner of the state Department of Finance and Administration (F&A).
Martin has been the interim commissioner since June 1 after former commissioner Mark Emkes’ retirement.
“I want to thank Larry for continuing to serve Tennesseans as the F&A commissioner,” Haslam said. “Putting together the budget is one of the most important things we do, and Larry’s skills and experience with complex systems and organizations is unmatched.”
Last year, he joined the governor’s staff as a special assistant to the governor, working alongside Human Resources Commissioner Rebecca Hunter to oversee the implementation of Haslam’s civil service reform, the Tennessee Excellence, Accountability and Management (TEAM) Act; and reviewing state employee compensation.
From September 2006 to December 2011, Martin, 65, served as deputy to the mayor in Knoxville for both Haslam and Mayor Daniel Brown. He was responsible for Finance, Public Works, Community Development, Information Systems, Purchasing and Risk Management for the City of Knoxville.
Prior to joining city government, Martin was an executive of First Horizon/First Tennessee Bank, joining the company in 1969 and serving in various capacities before retiring as the chief operating officer for First Tennessee Financial Services with responsibility for all Tennessee Regional Bank Markets; Merchant Services Processing; Hickory Venture Capital; and the Commercial, Corporate and Middle Market Divisions of the bank. A native of Jackson, Tenn., Martin received his bachelor of science from the University of Tennessee’s College of Business.
“I look forward to continuing the good work of the governor and applying his thoughtful and comprehensive approach to the budgeting process,” Martin said.
State Finance Commissioner Larry Martin said today overall May revenues were $31.5 million more than the state budgeted. Read more here.
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