State Is Strong Financially
Updated: Dec 10, 2022
This information comes from the office of 28th District State Senator Joey Hensley, MD, (R Hohenwald) who represents Giles and five other area counties.
Passing a balanced budget is the most important duty of the Tennessee General Assembly. While the budget isn’t usually presented to the General Assembly until February, there’s plenty of pertinent information and news to be aware of.
Departments are already announcing requests, economic statistics are published regularly, and experts are providing valuable testimony.
The state is in great financial condition despite challenges including inflation, which is impacting not only Tennessee, but the entire country and world.
The state has already collected $585.8 million more in taxes and fees than budgeted in the first three months of the 2022-2023 fiscal year, which began in July. And last fiscal year, the state collected $4.6 billion more than budgeted in taxes and fees.
Revenues in October, the third month of the fiscal year, overall were $1.5 billion, which is $125.4 million more than October of last year and $178.1 million more than the budgeted estimate. The growth rate for October revenues was 8.3%.
October revenues surpassed budgeted estimates due to strong sales tax remittances. Tennessee Department of Finance and Administration Commissioner Jim Bryson said in a press release that the largest retail sales gains for the month came from the categories of building materials and eating and drinking places.
For fiscal year 2022-2023, the state’s Funding Board is projecting a growth rate of 7.2%-7.7% while estimates drop to between 1.25% and 2.25% for fiscal year 2023-2024. Gov. Lee will build his budget for the upcoming fiscal year utilizing these estimates.
Sales tax collections are up dramatically in part because business activity is at an all-time high and because of the state’s ability to collect taxes on online sales, economists said at a November Tennessee State Funding Board meeting.
The tremendous increase in collections is of course also due to the state’s unprecedented population growth. Large amounts of in-migration are supporting labor force growth, and the growing economy is quickly absorbing those new workers, who tend to be high skilled workers with greater savings, according to economists.
Nationally, gross domestic product has declined in the first two quarters of 2022, and forecasters expect a similar decline through the middle of 2023. In 2021, Tennessee GDP growth was 8.6% compared to 5.7% nationally.
Tennessee has a proud tradition of being a fiscally conservative state that is well managed with the lowest possible tax burden to residents.
The AAA-ranked Volunteer State is the least indebted state in the nation per capita and is the number one state in the nation for fiscal stability. Tennessee also is one of only five states without road debt, and ranks in the top 3 of states for best-funded pension plans. Tennessee’s outstanding other post employment benefits (OPEB) obligation is estimated to be less than $250 million, down from $1 billion six years ago. This has been a legislative priority for several years.
One way to ensure the state’s financial stability in an economic downturn is maintaining adequate savings through Tennessee’s Rainy-Day Fund. The legislature has invested $250 million into the Rainy-Day Fund, bringing it to $1.8 billion, which is the highest level in state history.
This year, the General Assembly continued its commitment to low taxes for Tennesseans, approving over $280 million in tax cuts for fiscal year 2022-2023.
That includes $121.6 million to waive the state’s license plate registration fee for one year — a financial relief that benefits only Tennesseans and not out-of-state residents who shop and do business in the state — $80 million for a grocery sales tax holiday in August, 2022, and $68 million to reduce sales tax on broadband supplies to incentivize companies to accelerate the deployment of needed broadband services to rural communities, among other cuts.
As for federal American Rescue Plan Act funding, Tennessee received $3.725 billion, which has been spent on COVID-19 response, water infrastructure projects, and initiatives that support a strong economic recovery and strengthen the state’s fiscal stability.
As of Nov. 28, Tennessee’s unallocated ARPA funds balance is $148.9 million.
"I look forward to taking a deeper dive into the budget during the upcoming legislative session, and as always, I welcome the feedback of my constituents," Hensley said.
Sen. Hensley may be reached at 425 Rep. John Lewis Way N., Suite 742, Nashville, TN 37243, or 615-741-3100, toll free at 1-800-449-8366 ext. 13100 or by fax at 615-253-0231.
His district address is 855 Summertown Highway, Hohenwald ,TN., 38462, by phone at 931-796-2018, by cell phone at 931 -212-8823, or email: email@example.com