April 12, 2005

Tennessee Budget Remains in Surplus

Tennessee's sales tax revenue in March was $14.8 million more than estimated by the state's budget-makers. The AP has a report here that's good as far as it goes, but doesn't quite tell the whole story. Overall, revenue collection for the month of March was $14.8 million less than anticipated - but the state still, after eight months of revenue for the current fiscal year, is running a surplus of $32.7 million.

Sales tax revenue in March was 7 percent greater than in March 2004, while overall tax revenue collections in March were 4.3 percent greater than in March 2004.

For the first eight months of the current fiscal year, sales tax revenue - the largest single source of state revenue - is up nearly 4.4 percent over the first eight months of last fiscal year, and overall tax revenue is up 5.3 percent.

Bottom line: Tax revenue is growing faster than anticipated. Remember that when you hear the governor or any state politician or bureaucrat talk like Chicken Little about the state's finances.

There is a surplus. Hence, if the state faces any fiscal problems the cause is - purely - one of over-spending.