NASHVILLE – Tennessee Department of Finance and Administration Commissioner Jim Bryson announced that April revenues were less than budgeted estimates. The state’s revenues for April totaled $3.039 billion, which is 0.45 percent less than April 2023 and $74.2 million below the budgeted estimate.
“Total revenues for April were similar to the receipts from the same time last year but lower than the estimated amount for the month,” Bryson said. “Sales and use taxes, which represent taxable sales activity in March, indicated slight growth, whereas corporate taxes remained lower. Strong growth was observed in fuel and business taxes, elevating monthly collections. All other taxes combined grew by only 1.39%.
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“Since November, revenues have been mostly down compared to the budgeted estimate. Therefore, state resources are being managed with lower revised revenue estimates. State finances are being closely monitored, and economic activity is being observed to ensure that all budgeted obligations are met.”
On an accrual basis, April is the ninth month of the 2023-2024 fiscal year. General fund revenues were $70.5 million less than the budgeted estimate, while the other funds that share in state tax revenues were $3.7 million less than the estimates.
Sales tax revenues were $39.6 million less than the estimate for April and 0.62 percent more than April 2023. For nine months, revenues are $105.7 million lower than estimated. The year-to-date growth rate for nine months was 1.45 percent.
Franchise and excise tax revenues combined were $43.8 million less than the budgeted estimate in April, with a growth rate of negative 2.82 percent compared to April 2023. For nine months, revenues are $302.6 million less than the estimate, and the year-to-date growth rate is negative 7.23 percent.
Gasoline and motor fuel revenues for April increased by 2.17 percent compared to April 2023 and were $0.9 million more than the April budgeted estimate of $110.7 million. For nine months, revenues are $5 million more than estimates.
Motor vehicle registration revenues were $1.1 million less than the April estimate, and on a year-to-date basis, they are $0.5 million less than estimates.
Tobacco taxes were $0.1 million less than the April budgeted estimate of $18.1 million. For nine months, they are $14 million less than the budgeted estimate.
Privilege taxes were $13.6 million less than the April estimate, and on a year-to-date basis, August through April, revenues are $113.1 million less than the estimate.
Business taxes were $24.9 million more than the April estimate. For nine months, revenues are $25.2 million more than the budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $0.2 million more than the April estimate, and on a year-to-date basis, revenues are $3 million more than the budgeted estimate.
All other tax receipts were less than estimates by a net of $2 million.
Year-to-date revenues, August through April, are $494.2 million less than the budgeted estimate. The growth rate for nine months is negative 0.41 percent. General fund revenues are $500.9 million less than the budgeted estimate, and the four other funds are $6.7 million more than estimated.
The budgeted revenue estimates for 2023-2024 are based on the State Funding Board’s consensus recommendation from November 28, 2022, and adopted by the first session of the 113th General Assembly in April 2023. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
On November 6, 2023, the State Funding Board met again to hear updated revenue projections from various state economists. Following this meeting, on November 29, 2023, the board decided to adopt revised revenue growth ranges for the current fiscal year. The recurring growth ranges adopted include a low of negative 0.69 percent to a high of negative 0.19 percent for total taxes and a recurring range low of negative 0.50 percent to a high of 0.00 percent for general fund taxes.
On April 18, 2024, in the second session of the 113th General Assembly, the Legislature passed House Bill 2973/Senate Bill 2942, which included the Funding Board’s revised revenue ranges for the current year. Upon passage, revenue estimates were revised lowered by $798.4 million for total funds and $718.8 million for general fund revenue. The appropriations bill was signed by Governor Lee on May 15, 2024.
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