KNOXVILLE, Tenn.– A 5.5 increase in state revenue collections for August is encouraging in view of a possible slowdown in Tennessee’s economy, a University of Tennessee economist said Tuesday.
Collections were $26.7 million higher than for the same month a year agom, Dr. Matt Murray of UT-Knoxville’s Center for Business and Economic Research said. However, August collections of $508,448,000 were $1.5 million below the state’s projections for the month.
“Revenue collections were up at a good pace, considering the overall Tennessee economy is probably performing at a sub-par level,” Murray said.
“It’s very encouraging that we were still able to pick up a good volume of retail sales and a good volume of sales taxes for the state’s revenue coffers.”
Key to the increase were gains in the sales tax, up 6 percent, and excise and franchise taxes, up almost 19.5 percent, Murray said.
Consumer spending by individuals may have contributed to some of the increases, but the gains probably had more to do with business activity.
“It could be we are still seeing some construction activity in the state, relative to residential housing and business investment,” Murray said. “Businesses pay a substantial share of state sales taxes as they make purchases.”
Contact: Dr. Matt Murray (423-974-5441)