Tax revenue collected by the state of Tennessee jumped nearly 60% in the month of July, bringing in hundreds of millions of dollars the state wasn’t expecting.
Finance Commissioner Butch Eley says in a statement that much of the surplus is related to business taxes that had been owed earlier in the year and deferred. But even the sales tax, which represents recent economic activity, grew by 6% following three months of declines.
One month into the fiscal year, the state has a budget surplus of nearly $500 million. Eley says he still wants to be cautious.
“The impact of the COVID-19 pandemic on future revenues remains a concern,” he says. “We will continue to monitor national and global economic indicators.”
The Tennessee legislature cut roughly $1 billion from the state budget in June in response to dismal forecasts for revenue. Those cuts included slashing teacher raises for the year.