|FOR IMMEDIATE RELEASE
MONDAY, JUNE 8, 2009
CONTACT: LOLA POTTER
NASHVILLE, Tenn. - The decline in state tax collections continued for a tenth consecutive month in May, as overall May revenues were $716.5 million, or $123.3 million less than the state budgeted. May also marks the fifteenth month of negative growth for sales tax collections in the past 17 months.
“As the state’s revenue collections continue to deteriorate, we have to rely on a combination of reserves and reducing recurring expenses to help stabilize the budget,” Finance & Administration Commissioner Dave Goetz said. “We’ve worked hard for the past six years to build our reserves and manage spending, and that will continue to be critically important in managing next year’s budget, as economists agree that recovery may not be quick.”
On an accrual basis, May is the tenth month in the 2008-2009 fiscal year.
The general fund was under-collected by $111.9 million, and the four other funds were under-collected by $11.4 million.
Sales tax collections were $71.4 million less than the estimate for May. The May growth rate was negative 11.00%. For ten months revenues are under-collected by $538.3 million. The year-to-date growth rate for ten months was negative 7.15%..
Franchise and excise taxes combined were $22.9 million below the budgeted estimate of $49.0 million. The growth rate for May was negative 45.25%. For ten months revenues are under collected by $280.9 million and the year-to-date growth rate is negative 20.44%.
Privilege tax collections were $12.7 million below the May estimate. For ten months collections are $51.7 million below the budgeted estimate.
Tobacco tax collections were $4.0 million under the budgeted estimate of $29.1 million. For ten months revenues are under collected in the amount of $24.4 million.
Gasoline and motor fuel collections for May decreased by 12.86%. For ten months revenues are under-collected by $44.0 million and the ten month year-to-date growth rate is negative 6.91%.
Year-to-date collections for ten months were $1.011 billion less than the budgeted estimate. The general fund was under collected by $919.8 million and the four other funds were under collected by $91.1 million.
The budgeted revenue estimates are based on the State Funding Board’s consensus recommendation adopted by the second session of the 105th General Assembly in May of 2008.
The revised estimates for this fiscal year as presented in the 2009-2010 Budget Document assume an under collection in total taxes in the amount of $1.10 billion. The general fund under collection is projected to be $1.06 billion.
By tax source the assumed under collections are: Sales tax $544.2 million; F&E taxes $336.1 million; privilege taxes $80.6 million; hall income tax $58.0 million; highway fund road user taxes $48.6 million; and a net under collection of $40.0 million from all other tax sources.
On May 7, 2009 the State Funding Board met and revised revenue growth ranges for the current fiscal year ranging from -9.00% to -8.50% for total taxes, and -10.20% to -9.70% in general fund taxes.
These ranges recognize a revenue shortfall in total taxes from the original budgeted estimates in the amount of $1.280 billion at the low end of the range to $1.224 billion at the high end. The ranges for the general fund recognize a shortfall of $1.222 billion at the low end to $1.176 billion at the high end.