Revenue Flat
With just one month of revenue still to be counted, Tennessee's revenue shortfall for the just-ended fiscal year is well below the dire forecasts the Sundquist administration trumpeted in its failed attempt to scare legislators into backing a state income tax. While the administration claimed the state faced a shortfall of as much as $480 million, the shortfall after 11 months stands at just $390.5 million.

According to the Tennessee Department of Finance and Administration, the state collected $704.7 million in taxes in June - just $147,000 less than in June of last year, a statistically insignificant difference of 0.02%. It was, however, $26.5 million less than the administration had hoped to receive to fund its planned spending.

The all-important sales tax showed growth in June of nearly $3 million, compared to June 2001, and for the first 11 months of the fiscal year year sales tax revenue is up $3.6 million over last year, as the sales tax continues to mirror the state's economy.

Total tax collections for the first 11 months of the fiscal year are still on pace to achieve the second-highest revenue total in state history, behind only last year's record. Tax collections through June were $181.3 million below the first 11 months of the prior fiscal year, a decrease of approximately 2.5 percent.