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 KNOXVILLE, Tenn.– State sales tax collections during September increased 4.4 percent, the smallest increase since June’s 1.1 percent rise, although overall revenues remain good, a University of Tennessee economist said Thursday.

 “All in all, state revenues are good,” said Dr. Matt Murray of the UT-Knoxville Center for Business and Economic Research. “My concern is the sales tax moving forward only 4.4 percent. That’s not very encouraging.”

 Total revenue collections in September were $501.7 million, representing a 7.5 percent or $35.1 million increase over the same month a year ago.

Murray said a monthly sales tax collections increase in excess of 5 per cent is needed to insure that state government doesn’t end the fiscal year without enough money to meet its budget.

 “Weak sales tax collections can really compromise the state’s revenue situation,” Murray said. “Strong sales tax collections can make up for weaknesses in other revenue categories.”

 Representing about 50 percent of all state revenues, the sales tax is the state’s major source of income, Murray said.

Looking ahead to the holiday sales season, Murray said the expectation is for good sales based on the strength of the nation’s economy. But Tennessee may be a different story.

 “The state economy has been performing quite weakly. I would not expect a particularly strong season for the state’s retailers,” Murray said.

 Contact: Dr. Matt Murray (423-974-5441)