Report shows Tennessee’s financial position improved $7.4B last fiscal year
Published 3:45 pm Friday, December 30, 2022
THE CENTER SQUARE
Tennessee’s financial position is $7.4 billion better than it was the year before, according to the state’s recently released Annual Comprehensive Financial Report.
And the state has a combined fund balance of $19.2 billion, up $5.4 billion from the year before. That leaves the state with $15.8 billion in spendable fund balance with $1.6 billion in a rainy day fund as of June 30, according to the report.
“The increase was the result of operating grants received as a result of continued stimulus funds flowing to the state from the federal government coupled with significant increases in tax revenues,” the report said.
This year’s Tennessee budget is $52.8 billion including $26.6 billion from state funds. TennCare, which makes up roughly one-third of the budget, recently said that it has extra in reserves to cover the period of time after April 1 when it has a higher enrollment due to a nearly three-year federal emergency that stopped the process of removing those who no longer qualify for the program.
Last year, the state collected $4.6 billion more in taxes and fees than were budgeted and the report highlighted that Tennessee’s future outlook remains healthier than its peers across the country.
“In Tennessee, real GDP grew in the first quarter of 2022 and then slowed but remained positive in the second quarter, whereas the nation saw contractions in each of the first two quarters,” the report said. “The state has also seen a strong rate of in-migration in recent years, which has led to an uptick in economic activity.”
Tennessee’s sales tax collections have continued to outpace the budgeted amounts, with $742.7 million more than budgeted collected through the first four months of this fiscal year.
Economists believe Tennessee’s sales tax collections will continue to grow, just at a slower pace.
Dr. Don Bruce, a Professor of Economics and Director of the Boyd Center, recently estimated a 7.7% year-over-year increase in sales tax collections this year and 4.1% increase in fiscal 2024, going from $12.8 billion collected last fiscal year to nearly $12.8 billion collected this fiscal year and $14.4 billion in fiscal 2024.
Tennessee’s general obligation bonds and commercial paper debt decreased by $194.1 million during last fiscal year to a total of $1.8 billion due to payments made on previous debt.