KNOXVILLE, Tenn. — The state’s April tax collections, up 5.2 percent from the same month a year ago, indicate the state’s budget holds steady, a University of Tennessee economist said Tuesday.
“The most encouraging sign is that we don’t have any deterioration taking place in the state’s revenue situation,” said Dr. Matt Murray of UT-Knoxville’s Center for Business and Economic Research.
“Given the state’s weak economic growth — the weak job growth and a state unemployment rate that now exceeds the national unemployment rate — things could be much, much worse than they are.”
April collections included a 5.1 percent increase in sales tax revenues, corresponding to an increase nationally of 5.4 percent in March retail sales. April revenues are derived from March sales, he said.
Murray said the comparison between state and national figures puts into perspective the economic slowdown that has occurred in Tennessee.
“I anticipated a much worse situation,” Murray said. “The fact that we are trailing the U.S., but only by a bit, is generally encouraging in light of last year’s sluggish economic performance relative to other states.”
The State Department of Revenue reported April sales and use taxes up $165 million for the year to date. Franchise and excise taxes were up approximately $50 million.
Fuel taxes were almost flat at $401.7 million, compared with $398.3 million a year ago.
“It looks to me like everything motor vehicle-related — fuel, automobiles, registrations and title fees — all were pretty sluggish,” Murray said.
“That makes sense if we’re losing ground relative to the rest of the nation. You would expect people not to be spending as much on new cars and driving around as much as they did a year ago.”
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Contact: Dr. Matt Murray (423-974-5441)