December revenues show increase

NASHVILLE, TN – An extraordinary one-time increase in franchise and excise tax collections helped put state revenues above the budgeted estimate for December and year-to-date for five months. Finance and Administration Commissioner Dave Goetz reported today that overall December revenues were $919.7 million or $113.8 million more than the state budgeted. “While we are pleased with December collections, and where we are year-to-date, we must continue to be cautiously optimistic,” Goetz said. “Typically about a fourth of total franchise and excise tax collections come in April of each year. “The state’s conservative approach to revenue estimation serves to keep spending in check and help us avoid end-of-year red ink.” December\'s increase in franchise and excise collections includes the result of a federal audit of three companies which caused a substantial revision of federally-recognized income, on which F&E taxes are largely based. On an accrual basis, December is the fifth month in the 2006-2007 fiscal year. December collections were $113.8 million more than the budgeted estimate. The general fund was over collected by $114.1 million and the four other funds were under collected by $344,000. Sales tax collections were $8.6 million less than the estimate for December. The December growth rate was 2.69%. Accounting for $9.9 million in non-recurring audit assessments received in December 2005, the underlying growth rate for December 2006 is 4.67%. For five months revenues are under collected by $70.4 million. Franchise and excise taxes combined were $118.2 million above the budgeted estimate of $102.2 million. For five months revenues are over collected by $87.3 million. Gasoline and motor fuel collections for December increased by 1.81% but were $591,000 below the budgeted estimate of $71.2 million. For five months revenues are under collected by $3.7 million. Year-to date collections for five months were $50.2 million more than the budgeted estimate. The general fund was over collected by $50.2 million and the four other funds were even with the estimates. The budgeted revenue estimates are based on the State Funding Board’s consensus recommendation adopted by the second session of the 104th General Assembly in May of 2006.