Projections for State Shared Taxes

The county associations have been working to protect state shared taxes. You may remember that these revenue sources were cut the last time the state was dealing with a major budget shortfall. To date, we are generally getting positive responses on this issue, but we plan to continue sending the message that these revenue sources are essential to counties and need to be preserved.

However, you should be advised that state shared taxes, like many other revenue streams, are declining due to economic conditions. At the Tennessee Advisory Commission on Intergovernmental Relations meeting in January, projections for these revenue sources were presented. You can view them here. From this chart you can see that county governments stand to lose substantial dollars, (approximately $16 million) especially in the area of gasoline and motor fuel taxes which are critical to the operation of county highway departments. Hall Income Taxes and Beer taxes are also projected to be down. While other state shared taxes are projected to show some minimal growth, the over all trend is downward. Keep in mind that these figures do not show that revenues are coming in below projections; they are showing that revenues are coming in below prior year collections and represent actual losses in revenue.

It is important to keep a close watch on these figures as counties begin the budget process for next year.