(The Center Square) – October tax revenues were higher than last year but fell short of predictions, according to the Tennessee Department of Finance and Administration.
State collections for October were $22.6 million more than last year. The year-to-date numbers are 1.4% or $72.4 million above budget, according to the department.
“Despite the modest revenue growth in October, we are only slightly above our year-to-date estimates,” said Jim Bryson, commissioner of Finance and Administration. “As a result, we will closely monitor revenue and spending trends for the remainder of the fiscal year.”
General fund revenues for the third accrual month of the 2024-25 fiscal year are down $27.1 million from the forecast.
“Sales tax revenues came in slightly below estimate, though they reflect nearly $60.3 million in adjusted growth from last year’s reduced tax base,” Bryson said. “Corporate tax revenues, or franchise and excise taxes, also missed estimates, but fuel taxes, realty recordation and transfer taxes surpassed monthly expectations.”
Fuel taxes were up by 1.3 million above projections, according to the department.
State economists noted in a meeting with the State Funding Board earlier this month that changes to Tennessee’s franchise tax calculations due to policy changes led to a decrease of between 11.54% and 17% in revenues for the current fiscal year.
The changes were added to the October projections for this year. The year-to-date numbers show that franchise and excises are 0.82% or $6.4 million above predictions.
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The State Funding Board sets the revenue estimates in the fall before the January legislative sessions each year. The General Assembly approves the numbers.
The board meets to consider forecasts for the 2025-26 fiscal year on Nov. 25.