July 27, 2005

Playing Games

The Knoxville News Sentinel reports that State Revenue Commissioner Loren Chumley said yesterday the state expects to have a surplus above $100 million when the books are closed on the 2004-05 fiscal year. Chumley, speaking to the Rotary Club of Knoxville, attributed the windfall to a boost in business taxes, specifically franchise and excise taxes.

That's strange.

At the end of June, with 11 months of revenue in hand, the state's revenue surplus was already approaching $200 million - nearly double what Chumley is claiming - as I reported on July 8:

Tennessee state government continues to pile up a large revenue surplus, adding $92.6 million to that surplus just in the month of June, according to data released by the Department of Finance and Administration at 11 a.m. today. That data shows that, through the first 11 months of revenue collection for the 2004-05 fiscal year, revenue is up $194.5 million more than the budgeted estimate of revenue growth. The budgeted estimate is the amount of money required to balance the fiscal 2004-05 state budget as passed by the legislature in May 2004. However, Gov. Phil Bredesen's administration has already made plans to spend more than the legislature budgeted, which will use up most of the surplus.

When the final revenue total is released, probably around August 12, the proper comparison will be to the budgeted estimate. My prediction: Tennessee's actual revenue surplus for fiscal year 2004-05 will be around $225 million.