Tennessee's sales tax revenues grew 6.5 percent in the first quarter of the budget year, and general fund collections are $57 million above projections.
Sales taxes account for nearly two out of every three dollars collected for the state's general fund. October sales tax collections, which reflect economic activity in the previous month, came in at nearly $16 million above projections.
State Finance Commissioner Mark Emkes says that the growth of sales tax collections is the "best indicator of economic recovery."
Emkes calls himself guardedly optimistic, but also notes that problems beyond the state’s borders could impact Tennessee. The Commissioner says he's closely monitoring news about the national economy, federal budget negotiations, and even events in Europe.
Emkes says Tennessee also needs to prepare for a $360 million shortfall in its budget for the next fiscal year, largely due to inflationary increases in the costs of operating Tenncare, Tennessee’s Medicaid program.