The first three months of the State’s fiscal year, which began in August, held good news: revenues bounced upward, a welcome trend after lagging revenues plagued the 2013-2014 fiscal year.
However, the most recently released figures from November mark the first point in the 2014-2015 fiscal year where revenues were less than the budgeted estimate: $6.1 million less to be precise. The gap is mostly attributed to a volatile situation surrounding the State’s franchise and excise taxes.
The State Funding Board released a consensus report this month showing that 2015-2016 fiscal year revenues are generally expected to grow at slower rates than in previous years. They anticipate overall growth for FY 2015-2016 between 2.55 and 2.95 percent, with growth in the general fund ranging from 2.6 to 3 percent.
For contrast, final projections for the current fiscal year have overall total tax revenue growing in the range of 3.45 to 3.8 percent, and the general funding growing between 3.85 to 4.2 percent.
These revenue figures and projections are significant because they will, in large part, require the Governor and legislature to craft a more conservative budget than in years past (assuming the absence of any new revenue).
Several revenue measures have been publicly discussed by key legislators, including an increase to the gas tax and tightening loopholes in the franchise and excise tax structure.
We will keep you updated on the revenue situation as it relates to the State budget and the funding of public higher education. Much more will be known once the Governor releases his proposed budget, which typically occurs after the State of the State address in late January or early February.
Tags: Budget, revenue projections, State Funding Board, TN State Revenues