May 13, 2005

Tennessee Surplus Soars in April

Tennessee collected $15.8 million more in sales tax revenue in April than it had expected, and rolled up a $59.3 million monthly revenue surplus in April, as the state's overall budget surplus continues to grow.

Nine months into fiscal year 2004-05, the state now has a $91.9 million revenue surplus - that's nearly triple the $32.7 million surplus at the end of March.

If tax revenue in the final three months of this fiscal year merely matches the budgeted estimates, the state will have collected $91.9 million more than it needed to collect in order to balance the state budget that legislators passed almost one year ago. Any state spending in excess of that budget will eat into the surplus.

Sales tax collections were up 5.25 percent in April compared to April 2004, and are up 4.46 percent for the first nine months of the fiscal year compared to the same period a year previous.

To put it another way: Tennessee's allegedly obsolete tax code that is supposedly unable to generate sufficient revenue growth is currently piling up revenue much 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 revenue surplus. If the fiscal year ends and the surplus is nowhere to be found, the only cause will be - purely - one of over-spending by Gov. Phil Bredesen's administration.
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For more scrutiny of the Bredesen record, see Bredesen Watch.