10:17am

Thu May 29, 2014
Business

Report Suggests Strong Economic Growth Ahead for Tenn.

MURFREESBORO, Tenn. (WMOT)  --  A new report released by the Tennessee Secretary of State's Office suggests solid growth for Tennessee’s economy over the balance of 2014.

The report was created through a partnership between Secretary of State Tre Hargett and Dr. Bill Fox, Director of the Center for Business and Economic Research at the University of Tennessee.

Dr. Fox held a conference call for reporters to explain his findings. He says growth in the number of new businesses being launched in Tennessee in recent months is the best the state has seen since before the recession.

“That’s a good leading indicator of broader measures of the economy. So, strong growth in the number of filings in the first quarter of this year suggests good employment growth in the current quarter, and good personal income growth, and good tax revenue growth.”

Dr. Fox says that economic indicator has been borne out by a significant drop in Tennessee’s April unemployment rate.

Fox was not able to answer the one question reporters were most interested in: What caused the alarming drop in tax revenue collected by the state in recent months? Fox says it appears the drop in franchise and excise taxes resulted from what he called “one-time events,” but also said more study will be needy to determine exactly what happened.

“And even with the April collections, most large companies don’t file an actual return. They request an extension until October. So we’re still trying to understand what’s happening to franchise and excise taxes without actually seeing tax returns from companies explaining why they’re paying what they’re paying.”

The question comes following a decision by Governor Haslam to make steep cuts to the state budget that takes effect July 1, 2014. The governor eliminated cost of living raises for state employees and additional funding for Tennessee higher education as a result of the revenue shortfall.

Would you like to review the complete report?