After major surplus year, Tennessee again opts for conservative budget projection

Tennessee’s State Funding Board expects the state to receive around 7% more in tax revenue this fiscal year compared to last. That amount is lower than economists predicted last week.

These conservative projections are not uncommon. Last fiscal year, the state finished with $3.1 billion more in tax revenue than they anticipated.

More: How far does a $4B surplus really go for a state like Tennessee?

State Budget Director David Thurman says they remained conservative for fiscal year ’23 because this year saw an unexpected surplus from federal dollars.

“The recurring thing that we heard last week was caution, and what we’re seeing in the current year was a result of a lot of one-time events from federal stimulus, from change in spending patterns,” Thurman said. “And going forward there would be a big shift or a shift and resetting of those spending patterns.”

The governor and general assembly will use the predictions to craft the state’s spending plan going forward.

For the next fiscal year, they estimate a growth of about 2%.