Thursday, August 11, 2011

Revenue Is Up

As surprising as it may seem, Tennessee State tax revenue collections increased in July:

As Tennesseans know, our fair State doesn't have an income tax, so we are dependent on consumption taxes for the vast majority of our revenues, and especially on the sales tax. The fact that the State general fund has over-collected by $226 million (that means that $226 million more has been collected in tax than was originally estimated) is a sign that as bad as the economic situation is in Tennessee and elsewhere, it could be worse. Overall, the revenue growth is meager, but it is nonetheless a present reality. The second-and far more important-thing that the revenue numbers tell us is that while Standard and Poor's is threatening to downgrade Tennessee's bond rating, just as it has the federal government, Tennessee is in far better fiscal health than is Washington, and that should be considered when determining what our State's bond rating will be.

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