Staff Reports
Tennessee was unable to meet its expected tax revenue goals in April, falling short by a significant $74.2 million. This shortfall adds to the total estimated deficit of $494.2 million for the fiscal year, which ends in July.
While April collections exceeded $3 billion, they still fell short of the previous year’s numbers by less than half a percentage point. The state’s Department of Finance and Administration Commissioner, Jim Bryson, noted that the total revenues for April were on par with the previous year’s figures but fell below the projected amount for the month.
Tennessee April tax collections $74.2M short of budgeted estimates (The Center Square) – Tennessee collected $74.2 million less than the budgeted estimate in taxes and fees in April. That makes the state $494.2 million short of the budgeted estimates fo…https://t.co/sgCos4czO5
— The Black Chronicle (@BlackChron) May 17, 2024
One area that contributed to the shortfall was the sales tax collections, which were down 0.62% from April 2023, resulting in nearly a $40 million deficit compared to the budgeted estimates. Additionally, the franchise and excise taxes were $43.8 million less than expected, with collections down 2.82% from the previous year.
Bryson pointed out that while there was slight growth in sales and use taxes, representing taxable sales activity in March, corporate taxes remained lower. There was, however, observed growth in fuel and business taxes, helping to elevate the monthly collections. Despite this, all other taxes combined only grew by 1.39%.
The shortfall in tax revenues for Tennessee is concerning, as it highlights the need for prudent fiscal management and a focus on boosting the state’s economic growth to ensure that revenue targets are met in the future.
