MUFREESBORO, Tenn. (WMOT) -- The University of Tennessee is out with a yearly economic forecast that state government uses to plan its budget and the outlook is mostly favorable.
The study, prepared by the UT Center for Business and Economic Research, predicts Tennessee’s economy will grow this year, but at an even slower pace than in 2012.
One of the factors contributing to slow growth is the end of a payroll tax holiday implemented two years ago. UT’s Matt Murray, one of the report’s authors, says Tennessee retailers are already reporting lower sales.
“This is a significant increase in taxes for all of those individuals who earn wage and salary income. If you make - for example - $50,000 in wages, you will pay an additional $1000 a year in taxes this year.”
Murray says a stronger housing market and a more positive outlook for Europe, a major trading partner, suggest a much better year in 2014.