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February 24, 2020

Despite No Income Tax, Tennessee Is Drowning In A Growing Budget Surplus

Tennessee has a budget problem - tax revenue is gushing in ahead of all budget predictions. This is “despite” Tennessee having no state income tax.

January tax collections drive Tennessee budget surplus higher

Another month and more surplus tax money is flooding into Tennessee government coffers — an additional $129.4 million in January, or almost 12% more than anticipated, according to Gov. Bill Lee's administration.

“During January, total tax collections came to $1.55 billion, due primarily to strong growth in state sales taxes and corporate taxes, according to state Finance Commissioner Stuart McWhorter.

It was "driven by solid performances in retail and manufacturing sales," McWhorter noted.

Oh, by the way, manufacturing jobs are flooding into the state. This is despite the grave dances performed by Globalist RINOs and Principled Free Traders back when Mr. You-Didn’t-Build-That had his regulators’ feet on the throat of businesses trying to employ deplorable Americans and engage in domestic manufacturing.

"The economic growth we have experienced in these first six months puts the state in a good position to fund the current and upcoming fiscal years," McWhorter said, noting year-to-date total tax collections are outpacing estimates by 6.48%, which the commissioner said "signals a promising finish" for the 2020 fiscal year.

To keep Tennessee from drowning in excess tax revenue, legislators are working on ways to – no, not spend it – they’re actually working on how to return some of it to taxpayers.

Amid a Tennessee budget surplus, Hazlewood, Carter pursue separate approaches on food-tax holidays

With Tennessee government rolling in the dough with general budget surpluses now pegged at $750 million, two Hamilton County legislators have competing ideas on how to return some of the money to the public. Both House Finance Vice Chair Patsy Hazlewood (R) and Rep. Mike Carter (R) are focusing on doing that through grocery-food sales tax holidays. Meanwhile, Carter is working on legislation that would create a mechanism that returns not only much of this year's budget surplus to consumers in the form of lower food taxes but also does the same in future years when revenues gallop past state estimates.

Tennessee’s excess tax revenue situation is also despite having very low property taxes compared to the rest of the country. Rankings of state property taxes place Tennessee at around 13th or 14th lowest among the 50 states.

Strangely enough, neighboring Georgia is struggling to find the money necessary to cut its state income tax rate from 5.75% all the way down to 5.50%. The chair of Georgia’s Senate Finance Committee just can’t make the numbers work.

Senate finance chairman says he doesn’t 'see the math' for tax cut

“I don’t see the math there right now without some changes to the budget to do it,” state Sen. Chuck Hufstetler, a Rome Republican who chairs the Senate Finance Committee, told a crowd gathered Friday at the Georgia Freight Depot for Georgia Budget and Policy Institute conference.

Tennessee’s budget windfall is a real puzzler. Tennessee has zero income tax, low property taxes, nominal energy production, no sea ports, and it’s located in a backwards part of the country despised by all the best people.

I blame global warming.

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posted by Open Blogger at 12:51 PM

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