State expects $150 million surplus
Year-to-date collections for August through December are $82 million over estimates, with half of that attributed to larger-than-expected sales tax collections.
‘You have this happen in the first year out of any recession where you have a spike that occurs because the spending was kind of psychologically suppressed during the recession,’ Finance Commissioner Dave Goetz said Friday.
Goetz said the unanticipated money will go for one-time projects, not recurring expenses such as salary increases.
‘There is no shortage of different projects of a one-time nature where this money could be used,’ he said.
Gov. Phil Bredesen is expected to outline proposed uses of the money when he submits his budget to the legislature Feb. 2.
‘We will have estimates of what we hope to get, and we will have recommendations how to use it,’ Goetz said.
Bredesen has not said what he will do about state employee pay, but House Speaker Jimmy Naifeh said Thursday he did not think they will be getting raises.
Without a pay hike, Naifeh said, state employees will receive less take home pay because premiums under the state insurance plan are increasing.
Goetz said one-month revenues for December were $28.3 million more than budgeted estimates. Collections of the volatile franchise and excise taxes paid by businesses were $99.1 million for the month — $16.1 million over estimates.
‘You have people who are willing to spend again because they think times are good and things are getting better,’ Goetz said. ‘There is also new investment spending by business in new machinery processes and computer equipment and the like that hopefully will turn into more jobs. But we haven’t quite hit that last part yet.’
The state’s unemployment rate in November was 5.7 percent — the highest level since 1997.