Tennessee’s flattening revenue calls for financial officials to reassure.

Tennessee’s budget outlook is not as positive as it has been in recent years, but state financial officials are urging calm. Tax revenue fell short of projections in the last few months of 2023, with franchise and excise taxes missing predictions by $146.8 million and the professional privilege tax missing by $33.1 million. However, sales tax revenue remained strong, coming in $47.5 million over budgeted numbers. It is estimated that revenue will be about $718.8 million short during the 2023-24 fiscal year. While officials say the state has some breathing room due to $2.6 billion in one-time expenses that won’t appear on the balance sheet next year, this extra money is likely to be partially spent on Governor Bill Lee’s school voucher plan and a new franchise and excise tax collections method. This tax change is being pushed by the Department of Revenue and the attorney general’s office as a “legislative fix” following a U.S. Supreme Court ruling. Tennessee Lookout is a news outlet within the States Newsroom network.