State of Tennessee Revenues Report for February 2024

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NASHVILLE – Tennessee Department of Finance and Administration Commissioner Jim Bryson today announced that February revenues were less than budgeted estimates. Overall February state revenues were $1.325 billion, which is 0.43 percent less than February 2023 and $59.9 million less than the budgeted estimate.

“State tax revenues for the month of February were only slightly less than reported revenues from this same time last year despite significant environmental challenges,” Bryson said. “Sales tax collections, reflecting January consumer activity, were negatively impacted by a week-long severe winter weather event that curtailed both spending and transportation. Conversely, franchise and excise tax revenues, and privilege tax receipts, both showed signs of increased growth for the first time this year.

“Despite February revenue numbers being below our budgeted estimates, we are encouraged by some of the positive signs we are witnessing. Nonetheless, it remains important for us to maintain close controls on state spending and carefully monitor continuing revenue trends.”

On an accrual basis, February is the seventh month in the 2023-2024 fiscal year.

General fund revenues were less than the budgeted estimates in the amount of $62.3 million while the four other funds that share in state tax revenues were $2.4 million more than the estimates.

Sales tax revenues were $43.9 million less than the estimate for February and 1.68 percent lower than February 2023. For seven months, revenues are $115.9 million less than estimated. The year-to-date growth rate is 0.95 percent.

Franchise and excise tax revenues combined were $1.5 million less than the February budgeted estimate. For seven months, revenues are $235.7 million less than the estimate and the year-to-date growth rate is negative 10.34 percent.

Gasoline and motor fuel revenues for February decreased by 5.47 percent compared to February 2023 and were $5.7 million less than the February budgeted estimate of $97.4 million.  For seven months, revenues are less than estimates by $2 million.

Motor vehicle registration revenues were $4.7 million more than the February estimate, and on a year-to-date basis they are $1.6 million more than estimates.

Tobacco taxes were $0.2 million less than the February budgeted estimate of $15.7 million. For seven months, tobacco tax revenues are $9.2 million less than the budgeted estimate.

Privilege taxes were $13.5 million less than the February estimate. Year-to-date, privilege tax revenues are $92.4 million less than the budgeted estimate and growth is negative 13.54 percent.

Business taxes were $2 million more than the February estimate. For seven months, revenues are $3.2 million more than the budgeted estimate.

Mixed drink, or liquor-by-the-drink, taxes were $1.6 million less than the February estimate, but year-to-date revenues are $2.5 million more than the budgeted estimate.

All other tax receipts were less than estimates by a net of $0.2 million.

Year-to-date revenues for seven months were $437.6 million less than the budgeted estimate. General fund revenues are $441.2 million less than the estimate, and the four other funds total $3.6 million more than estimates. The year-to-date growth rate is negative 0.92 percent.

The budgeted revenue estimates for 2023-2024 are based upon 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. Also incorporated in the estimates are any changes in revenue enacted during the 2023 session of the General Assembly. 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.

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Source: TN Dept. of Finance

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