The State Comptroller's office has issued an update on the state's tax collections reflecting October's figures. That report is posted on our main website here:
http://www.tncountycommissioners.org/files/Investor_Update_November_2009.pdf
Archived reports are available through the Comptroller's site:
http://www.tn.gov/comptroller/
The reports are under the tab for "Investor Information" and are arranged by fiscal year.
Friday, November 20, 2009
Tennessee Behind in Revenue, but It Could Be Much Worse
According to a nationwide survey of states, Tennessee is one of at least 35 states that are behind in revenue collections during this budget year. However, Tenessee's revenue gap is only 0.7% of the general fund budget. Of those states experiencing a gap, only Florida has a smaller gap at 0.6%. Arizona was worst at 20.5%.
For the full report, go to the Center on Budget and Policy Priorities website at this link: http://www.cbpp.org/cms/?fa=view&id=711
For the full report, go to the Center on Budget and Policy Priorities website at this link: http://www.cbpp.org/cms/?fa=view&id=711
Tuesday, November 17, 2009
NACo Publications on County Economic Status
According to the National Association of Counties, the nation’s midsize and smaller counties are experiencing the full effects of the down economy and are struggling to cope with declining revenues. The latest survey results published by NACo can be accessed here The survey includes responses from three Tennessee Counties: Campbell, Gibson and Scott.
Nearly half of the responding counties, 47 percent, said that their anticipated budget shortfall was worse than expected and 4 out of 5 respondents (82 percent) said the shortfalls will continue into their next fiscal year. Further, the survey showed that counties are taking any and all actions to cope with sharply declining revenues – from travel restrictions and delaying purchases to more drastic actions such as cutting services, increasing taxes, furloughs and layoffs.
One hundred thirty eight counties from 34 states responded to the survey in late October sent randomly to 1,500 counties across the country. The sample group was made up primarily of midsize to smaller counties by population. The survey showed how counties are taking an “all of the above” approach to address shrinking revenues and continue to provide essential public services. For example, less severe budget actions counties are taking include:
• delaying purchases or repairs (60 percent of responding counties);
• delaying capital investments (54 percent);
• use of rainy day/reserve funds (44 percent);
• travel restrictions (41 percent); and
However, a significant number of responding counties said they are taking more severe actions to cope with declining revenues, including:
• salary and/or pay freezes (59 percent);
• hiring freezes (49 percent);
• increasing property taxes (15 percent).
• layoffs (26 percent); and
• furloughs (12 percent).
Other actions include renegotiating labor contracts (13 percent), increasing the local option sales tax rate (2 percent), reorganizing county fleets (13 percent) and implementing four-day work weeks (7 percent).
The NACo survey also aimed to determine how counties are being affected by the $787 billion American Recovery and Reinvestment Act which was signed into law by President Obama in February. About two-thirds of the responding counties (61 percent) said they expect to receive funding as a result of the Recovery Act. However, most counties said they have received less than half of the expected funds so far. The majority of anticipated funds are through the new Energy Efficiency and Conservation Block Grant program, the Community Development Block Grant Program, and various transportation programs.
America’s metropolitan counties are suffering with declining revenues as well. An October 2008 NACo survey of larger counties (more than 100,000 residents) found that two-thirds of those responding counties anticipated a shortfall this fiscal year resulting in budget fix remedies such as salary and hiring freezes, service cutbacks, furloughs and layoffs. (See survey links below)
Related resources:
A previous report on this topic from a June 2009 survey is available here and another report from October 2008 is available here.
Additionally, NACo also has available a report from June 2008 on foreclosures and their impact on counties here.
Nearly half of the responding counties, 47 percent, said that their anticipated budget shortfall was worse than expected and 4 out of 5 respondents (82 percent) said the shortfalls will continue into their next fiscal year. Further, the survey showed that counties are taking any and all actions to cope with sharply declining revenues – from travel restrictions and delaying purchases to more drastic actions such as cutting services, increasing taxes, furloughs and layoffs.
One hundred thirty eight counties from 34 states responded to the survey in late October sent randomly to 1,500 counties across the country. The sample group was made up primarily of midsize to smaller counties by population. The survey showed how counties are taking an “all of the above” approach to address shrinking revenues and continue to provide essential public services. For example, less severe budget actions counties are taking include:
• delaying purchases or repairs (60 percent of responding counties);
• delaying capital investments (54 percent);
• use of rainy day/reserve funds (44 percent);
• travel restrictions (41 percent); and
However, a significant number of responding counties said they are taking more severe actions to cope with declining revenues, including:
• salary and/or pay freezes (59 percent);
• hiring freezes (49 percent);
• increasing property taxes (15 percent).
• layoffs (26 percent); and
• furloughs (12 percent).
Other actions include renegotiating labor contracts (13 percent), increasing the local option sales tax rate (2 percent), reorganizing county fleets (13 percent) and implementing four-day work weeks (7 percent).
The NACo survey also aimed to determine how counties are being affected by the $787 billion American Recovery and Reinvestment Act which was signed into law by President Obama in February. About two-thirds of the responding counties (61 percent) said they expect to receive funding as a result of the Recovery Act. However, most counties said they have received less than half of the expected funds so far. The majority of anticipated funds are through the new Energy Efficiency and Conservation Block Grant program, the Community Development Block Grant Program, and various transportation programs.
America’s metropolitan counties are suffering with declining revenues as well. An October 2008 NACo survey of larger counties (more than 100,000 residents) found that two-thirds of those responding counties anticipated a shortfall this fiscal year resulting in budget fix remedies such as salary and hiring freezes, service cutbacks, furloughs and layoffs. (See survey links below)
Related resources:
A previous report on this topic from a June 2009 survey is available here and another report from October 2008 is available here.
Additionally, NACo also has available a report from June 2008 on foreclosures and their impact on counties here.
Monday, November 16, 2009
Commercial Appeal reports on the First Day of Budget Hearings
In a worst-case scenario, the state budget could face over a $1 billion gap between rising non-discretionary spending and the tax revenue available to fund those programs. See the full article on the first day's budget hearings from Rick Locker, the legislative beat writer for the Memphis Commercial Appeal
here.
here.
Governor's Budget Hearings Begin
The Governor's budget hearings began this morning with the proposed budget for the Department of Education. Several other Commissioners will present proposed department budgets today and over the coming days. For a full schedule of these hearings and to access live streaming audio and video of the hearings, go to http://www.tennesseeanytime.org/gov/budget/.
In case you miss some of the hearings, you can also access archives of the meetings.
In case you miss some of the hearings, you can also access archives of the meetings.
Tuesday, November 10, 2009
Bredesen to Hold Open State Budget Hearings
Governor Phil Bredesen will hold his eighth round of open state budget hearings beginning Monday, November 16, at the State Capitol in the Executive Conference Room. The hearings can also be viewed live at www.tn.gov. The schedule for department budget hearings is as follows:
Monday, November 16
10:45 a.m. – 11:45 a.m. Education
11:45 a.m. - 12 p.m. Books from Birth Foundation
1:30 p.m. – 2:15 p.m. Correction
2:15 p.m. – 2:45 p.m. Revenue
3 p.m. – 3:30 p.m. Veterans Affairs
3:30 p.m. – 4 p.m. Military
4:15 p.m. – 5 p.m. Environment and Conservation
5 p.m. – 5:30 p.m. Cover Tennessee
Wednesday, November 18
1:30 p.m. – 2 p.m. Finance and Administration
2 p.m. – 2:45 p.m. Commerce and Insurance
3 p.m. – 3:45 p.m. Economic and Community Development
4 p.m. – 5 p.m. Bureau of TennCare
5 p.m. – 5:30 p.m. Tourist Development
Thursday, November 19
12:30 p.m. – 1 p.m. Safety
1 pm. – 1:45 p.m. Division of Intellectual Disabilities Services
1:45 p.m. – 2:30 p.m. Human Services
3:30 p.m. – 4 p.m. Labor and Workforce Development
Friday, November 20
12:30 p.m. – 2 p.m. Higher Education
2 p.m. – 2:30 p.m. Tennessee Education Lottery Corporation
2:30 p.m. – 3 p.m. Agriculture
3:15 p.m. – 4:15 p.m. Children’s Services
Monday, November 23
12:30 p.m. – 2:30 p.m. Health
2:30 p.m. – 3 p.m. Tennessee Bureau of Investigation
3:15 p.m. – 4 p.m. Mental Health and Developmental Disabilities
4 p.m. – 4:30 p.m. Transportation
4:30 p.m. – 5 p.m. General Services
5 p.m. – 5:30 p.m. Human Resources
Monday, November 16
10:45 a.m. – 11:45 a.m. Education
11:45 a.m. - 12 p.m. Books from Birth Foundation
1:30 p.m. – 2:15 p.m. Correction
2:15 p.m. – 2:45 p.m. Revenue
3 p.m. – 3:30 p.m. Veterans Affairs
3:30 p.m. – 4 p.m. Military
4:15 p.m. – 5 p.m. Environment and Conservation
5 p.m. – 5:30 p.m. Cover Tennessee
Wednesday, November 18
1:30 p.m. – 2 p.m. Finance and Administration
2 p.m. – 2:45 p.m. Commerce and Insurance
3 p.m. – 3:45 p.m. Economic and Community Development
4 p.m. – 5 p.m. Bureau of TennCare
5 p.m. – 5:30 p.m. Tourist Development
Thursday, November 19
12:30 p.m. – 1 p.m. Safety
1 pm. – 1:45 p.m. Division of Intellectual Disabilities Services
1:45 p.m. – 2:30 p.m. Human Services
3:30 p.m. – 4 p.m. Labor and Workforce Development
Friday, November 20
12:30 p.m. – 2 p.m. Higher Education
2 p.m. – 2:30 p.m. Tennessee Education Lottery Corporation
2:30 p.m. – 3 p.m. Agriculture
3:15 p.m. – 4:15 p.m. Children’s Services
Monday, November 23
12:30 p.m. – 2:30 p.m. Health
2:30 p.m. – 3 p.m. Tennessee Bureau of Investigation
3:15 p.m. – 4 p.m. Mental Health and Developmental Disabilities
4 p.m. – 4:30 p.m. Transportation
4:30 p.m. – 5 p.m. General Services
5 p.m. – 5:30 p.m. Human Resources
October Revenues Continue Downward Trend
For the third consecutive month in the fiscal year that began July 1, state tax collections fell below budgeted estimates. Finance & Administration Commissioner Dave Goetz today announced that state revenue collections for October were $698.2 million, which is 1.53% below October 2008 collections. October collections reflect consumer spending in September.
“October is the 17th consecutive month in which sales tax collections have experienced negative growth,” Goetz said.
October collections were $31.7 million less than the budgeted estimate. The general fund was under collected by $24.2 million and the four other funds were under collected by $7.5 million.
Sales tax collections were $38.6 million less than the estimate for October. The October growth rate was negative 7.80 %. Year-to-date the growth rate is negative 8.47%.
Franchise and excise combined collections for October were $11.9 million, and they were $9.6 million above the budgeted estimate of $2.3 million.
Gasoline and motor fuel collections were $2.1 million more than the budgeted estimate of $71.8 million. However, the sales tax allocation to the Transportation Equity Fund was a negative $7.8 million. The net result was a shortfall in the highway fund estimate.
Year-to date collections for three months were $101.3 million less than the budgeted estimate. The general fund was under collected by $88.2 million and the four other funds were under collected by $13.1 million.
UPDATE:
According to a news report by Tom Humphreys of the Knoxville News Sentinel (find the article here), while these collections failed to meet estimates of the Department of Finance and Administration, they exceed a different set of estimates used by the Fiscal Review Committee of the legislature. The Fiscal Review Committee and the Department basically project similar revenue collections for the entire fiscal year, but they differ when it comes to projected revenues by month. Fiscal Review projected lower collections than F&A for the first 3 months, but then their estimates are higher for the period of November through April. The projections are fairly similar for the last quarter of the year. At any rate, the first two months collections were behind both sets of estimates. However, if Fiscal Review's month by month projections are more accurate, then revenues are not as far off pace as reported by F&A.
“October is the 17th consecutive month in which sales tax collections have experienced negative growth,” Goetz said.
October collections were $31.7 million less than the budgeted estimate. The general fund was under collected by $24.2 million and the four other funds were under collected by $7.5 million.
Sales tax collections were $38.6 million less than the estimate for October. The October growth rate was negative 7.80 %. Year-to-date the growth rate is negative 8.47%.
Franchise and excise combined collections for October were $11.9 million, and they were $9.6 million above the budgeted estimate of $2.3 million.
Gasoline and motor fuel collections were $2.1 million more than the budgeted estimate of $71.8 million. However, the sales tax allocation to the Transportation Equity Fund was a negative $7.8 million. The net result was a shortfall in the highway fund estimate.
Year-to date collections for three months were $101.3 million less than the budgeted estimate. The general fund was under collected by $88.2 million and the four other funds were under collected by $13.1 million.
UPDATE:
According to a news report by Tom Humphreys of the Knoxville News Sentinel (find the article here), while these collections failed to meet estimates of the Department of Finance and Administration, they exceed a different set of estimates used by the Fiscal Review Committee of the legislature. The Fiscal Review Committee and the Department basically project similar revenue collections for the entire fiscal year, but they differ when it comes to projected revenues by month. Fiscal Review projected lower collections than F&A for the first 3 months, but then their estimates are higher for the period of November through April. The projections are fairly similar for the last quarter of the year. At any rate, the first two months collections were behind both sets of estimates. However, if Fiscal Review's month by month projections are more accurate, then revenues are not as far off pace as reported by F&A.
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