by Sarah Dolgin
Tennessee Sen. Bo Watson, R-Hixson, gave the lowdown on the state’s financial outlook Monday at the Hamilton County Pachyderm Club meeting as attendees indulged in Cracker Barrel offerings and sweet tea.
Watson is the chair of the Tennessee Senate’s Finance, Ways and Means Committee and broke down the state’s August revenue report, the state’s expenditures, where Tennessee ranks in terms of debt and gave an update on former Tennessee Gov. Bill Haslam’s Improve Act.
Here are four takeaways from Watson’s presentation:
General fund lag will catch up
Tennessee state revenues in August were $1.548 billion, which is more than $1 million more than the monthly estimate and $36.3 million more than August 2023 revenues, according to Watson.
While state revenues were up in August, general fund revenues, which are predominantly supported by sales tax, were $6.5 million less than the August estimate, Watson said. The four other funds that share in state tax revenues were $7.8 million more than estimates, according to his presentation.
“There’s really no need to be concerned about the general fund being a little bit below budget because it’s due to the franchise and excise tax, and it catches up through the course of the year in its history,” Watson said in a phone interview with the Chattanooga Times Free Press.
Watson said there was a significant difference in 2023 between budget revenues and the actual revenues coming in. He said the revenues coming in a year ago were much lower than what the state had budgeted, so the budget funding was modified to address the gap.
“We have returned to a more normal funding pattern now, and our budget is aligning better with our revenues than it was a year ago,” Watson said in a phone interview.
