October 15, 2003

BREAKING NEWS: TENNESSEE SURPLUS GROWS!

Tax revenue continues to pour into Tennessee state government, and the state, creating a large and growing surplus. After two months of revenue collection for the 2003-04 fiscal year, Tennessee has a $30.2 million revenue surplus. The state collected $836.9 million in tax revenues in September, some $19 million more than the budgeted estimates, according to data just released at 11 a.m. Wednesday day by the Tennessee Department of Finance & Administration. You read it here first.

Strong growth in sales tax collections - an indicator of a growing economic recovery - generated $10.8 million more than was projected in September, and for the two-month period, the sales tax has generated $21.9 million in surplus revenue.

Sales tax collections in September were up a strong 4.31% over September 2002, and for the two months of August-Septmber, revenue from the sales tax was up a very healthy 8.49%.

As I said last month, such a large gain in sales tax revenue driven by a growing economy effectively destroys the notion pushed by those who favor creating a state income tax that the sales tax is an obsolete tax that can not keep up with the economy. Fact is, the sales tax is now bringing in more revenue than expected by the state's economic advisers, and more revenue than necessary to fund the state budget.

The year-to-date surplus includes $24.2 million in surplus in the state's general fund and $6 million in to other four funds.

For coverage of last month's surplus, go here and then here.

UPDATE: The Tennessean posted an AP newsbrief on the tax revenue data at 4 p.m. Wednesday, only 4.5 hours after I published the news.