Revenue is Revenue
The administration of Gov. Don Sundquist is up to its tired old tricks again, deliberately using misleading analysis of revenue data in order to make the state's fiscal problems appear worse and enhance the chances of passing an income tax

Consider the most recent revenue announcement by Sundquist's finance commissioner, C. Warren Neel, who reported that revenue collected in January was up 2.26 percent over the same month a year ago. In that press release, Commissioner Neel put a heavily negative spin on the sales tax revenue data in order to make rising revenue appear to be falling.

Here are the facts:
In his February 12 press release, Neel said overall revenue collected in January rose 2.26 compared to a year ago; and overall sales tax revenue rose 0.92 percent. But, he said, if you exclude sales taxes collected on vehicle purchases, revenue from the sales tax declined 0.39 percent compared to January 2001.

Neel contends that is significant because January collections represent retail sales in December, "which means holiday sales were well under the national increase of 2.7%."

It is unclear where Neel got his figure of 2.7 percent growth for national December retail sales growth. The U.S. Commerce Department reports total retail sales nationally grew 4.1 percent in December compared to December 2001. The TeleCheck Retail Index issued by Houston-based check acceptance company TeleCheck Services says December sales rose 2.1 percent. The Goldman Sachs Retail Index tallied 2.3 percent growth in same-store retail sales.

Neel may be conflating two different bits of data: Telecheck indeed reports that sales for the "holiday" shopping period, the 32 days between Thanksgiving and Christmas, rose 2.7 percent in Tennessee, but only 2.2 percent nationally.

Since Neel doesn't identify the source of his 2.7 percent figure, it is impossible to know if it includes – or doesn't include – auto sales, nor what period of time it covers, making accurate analysis difficult.

The Commerce Department's figures do include auto sales, but TeleCheck's data doesn't. Until we know the source, composition and accuracy of his 2.7 percent figure, we should not accept at face value his comparing it to a hypothetical revenue figure for Tennessee that excludes auto sales.

Even worse, Neel's latest press release uses insincere and shifting analysis designed to sustain the administration's quest for an income tax.

Neel has managed to flip-flop completely on the importance of auto sales to the state's revenue, once again demonstrating this administration's willingness to distort facts and shift the truth in order to portray good news as bad news and keep the income tax drive alive.

As reported by The Tennessean in a paraphased quote, Neel said collections were lower than in December 2000 "if you don't take into account robust vehicle sales."

His contention is that the sales tax data, excluding rising vehicle sales, proves the need for an income tax. But that's not what he was saying last summer when Neel was using falling auto sales to justify an income tax.

Back then, Neel told the State Funding Board at a hearing attended by dozens of legislators and reporters that vehicle sales were a major part of the state's sales tax revenue and falling auto sales were causing revenue to grow more slowly than anticipated.

So which is it? Back then, we were asked to focus on sales tax revenue from vehicle sales because it was declining. Today, we are asked to ignore the same revenue source because it is rising. This is not accidental. Neel's press releases didn't start including a calculation for sales tax revenue that excludes vehicle sales until sales tax revenues stabilized in October and started trending upward again in part due to rising vehicle sales.

That month, the sales tax generated basically stable revenue compared to the same month of 2000, but Neel suddenly started excluding revenue from auto purchases, in order to report sales tax revenue was down 3.2 percent. In earlier months, when declining vehicle sales were dragging down sales tax revenue, Neel didn't offer separate data on non-auto retail sales tax revenue that, presumably, would have appeared more positive.

The truth is, Neel and his boss, Gov. Sundquist, want you to ignore good news and focus only on the data they selectively choose and deceptively spin in order to make it appear the sales tax is why we have a deficit. Rising revenue is ignored, falling revenue is spotlighted.

It doesn't pass the smell test. The fact is, revenue is revenue. And sales are sales, whether you buy a car or a candy bar, and both sales and sales tax revenue is rising again in Tennessee after a brief recessionary dip. That's good news, despite the administration's insistence on seeing clouds in a steadily brightening sky.

By the way, according to TeleCheck, retail sales in Tennessee grew an average of 2.6 percent per month from October through December. Including auto sales, Neel's numbers also show average growth of 1.7 percent per month in sales tax collections. But by arbitrarily excluding auto sales for those three months, Neel claims sales tax revenue has declined an average of 0.46 percent per month.

It's nonsensical, deceptive political spin, brought to you by the same people who promise that there's nothing left to cut and if you'll just give them an income tax, it won't go up.