March 13, 2007

A Surplus Grows in Tennessee

Tennessee's tax revenue surplus surged another $30.3 million in February - almost enough to pay for cutting the sales tax on food by half a cent next year - and now totals $115.7 million with five months left to go in revenue collections for the 2006-07 fiscal year. Here's the press release and data from the Tennessee Department of Finance & Administration.

Based on recent history, Tennessee is probably headed toward another $300-$400 million surplus when the books are closed at the end of the fiscal year. Seven months into the fiscal year, this year's revenue surplus already 53 percent larger than last year's surplus after the first seven months of fiscal year 2005-06. After seven months of revenue collection last fiscal year, the state's revenue surplus was $75.3 million - but the state ended the year with a surplus of $411.2 million.

Despite the surging surplus, Gov. Phil Bredesen remains adamantly opposed to reducing the state's sales tax on food even by half a cent, which would cost the state just $39 million, an amount not much larger than the surplus revenue the state collected just in February.