KNOXVILLE, Tenn. — State revenue collections in December totaled a robust $502 million, an increase of 6.2 percent compared with the same month a year ago, a University of Tennessee economist said Friday.
Dr. Matt Murray of the UT-Knoxville Center for Business and Economic Research said the increase was $6 million or 1.2 percent above projected collections for the month.
“December was an exceptionally strong month for revenue collections,” Murray said. “We are not seeing any deterioration in the state’s revenue performance.”
Year-to-date collections, with five months counted, totaled $2.56 billion, an increase of 6 percent for the same period a year ago.
However, Murray said economists expect a decline in revenue growth because the state’s economy is slowing. Compared to the nation as a whole, Tennessee has performed very poorly in terms of growth in per capita personal income and jobs creation, Murray said.
“Yet sales in November in Tennessee were up almost 5 percent, while nationally sales were up only 2 percent,” Murray said. “There is a sharp incongruity between the state’s economic performance — the slow growth in income and jobs creation — and the sustained increase in tax revenues, particularly within the sales tax.”
“If there is an adjustment, my guess is it will come on the side of revenues and that the revenue growth for the state will slow as we move further into the year.”
Sales tax collections, the state’s primary revenue source, were up an adjusted 4.9 percent over December a year ago, Murray said.
Without the adjustment, sales tax collections were up 7.5 percent for the month due to an extra payment to the state by a large retailer, Murray said.
Contact: Dr. Matt Murray (423-974-5441)