NASHVILLE – The Tennessee Department of Finance and Administration Commissioner, Jim Bryson, announced that July revenues reached $1.7 billion, reflecting an increase of $51.2 million over the previous year. This represents a total growth rate of 3.10 percent for the month.
“July total tax revenues grew more than expected in the final month of the fiscal year,” Bryson stated. Sales tax receipts, motor vehicle registration fees, fuel tax, gross receipts taxes, and franchise and excise tax collections all contributed to the monthly revenue gains.
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Due to strong collections in the final quarter, the state will meet the revised budget estimate for the 2023-2024 fiscal year. Total taxes exceeded the forecast by $206.8 million, with general fund tax collections surpassing the November estimate by $119.3 million.
On an accrual basis, July marks the final month in the 2023-2024 fiscal year. Final reported revenues will undergo accrual accounting adjustments, which may alter the recorded cash amounts upon audit.
General fund revenues fell short of the original budgeted estimates set in July 2023 by $35.3 million, and the four other funds that share state tax revenues were $2.5 million less than the original estimates. Sales tax revenues were $48.4 million below the estimate for July but showed a 0.88 percent increase compared to July 2023. For the year, sales tax revenues were $187.3 million less than expected, with an annual growth rate of 1.62 percent.
Franchise and excise tax revenues were $1.4 million above the monthly budget estimate and showed a 7.47 percent growth rate compared to July 2023. However, for the year, these revenues were $326.3 million below the original estimate, with a year-to-date growth rate of negative 5.55 percent.
Gasoline and motor fuel revenues for July increased by 6.02 percent compared to July 2023, exceeding the budgeted estimate of $111.7 million by $1.5 million. For the year, these revenues surpassed estimates by $8.3 million. Motor vehicle registration revenues were $0.1 million below the July estimate but $6 million above the year-to-date estimate.
Tobacco tax revenues were $0.8 million below the July budgeted estimate of $18.6 million and fell short by $23.7 million for the year. Privilege tax revenues were $16.7 million less than the July estimate and $133.7 million below the year-to-date estimate. Gross receipts taxes, or bottlers tax revenues, exceeded the July estimate by $20.4 million and were $31.7 million above the year-to-date estimate.
Business tax revenues were $5.3 million above the July estimate of $13.8 million and $31.8 million more than the budgeted estimate for the year. Mixed drink or Liquor-by-the-drink taxes were $1.1 million above the July estimate and $3.5 million more than the budgeted estimate for the year. All other tax revenues were $1.5 million below estimates.
For the year, total revenues were $593 million less than the original budgeted estimate. The general fund recorded $600.9 million less than the budgeted estimate, while the four other funds were $7.9 million more than estimated.
The budgeted revenue estimates for 2023-2024 are based on the State Funding Board’s consensus recommendation from November 2022 and were 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 to hear updated revenue projections from state economists. Following this meeting, the board adopted revised revenue growth ranges for the current fiscal year on November 29, 2023. 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.
In April 2024, 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 down by $798.4 million for total funds and $718.8 million for general fund revenue. The appropriations bill, Public Chapter 966, was signed by Governor Lee on May 15, 2024.
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