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.