(The Center Square) – Tennessee’s top economists presented different revenue projections but agreed on one thing – the state’s cut to the franchise tax has led to a decrease.
The Tennessee Department of Revenue gave the State Funding Board a forecast of 1.6% in total revenue and 2.2% in general fund revenue for fiscal year 2025. The numbers were better for fiscal year 2026 – a 3.1% total revenue increase and a 3.9% general fund revenue increase.
The Fiscal Review Committee Staff predicted 2024-25 fiscal year growth at 0.79% growth. For 2025-26, the total revenue fund growth is projected at 3.17%.
Changes to Tennessee’s franchise tax calculations helped businesses but have taken a bite out of state revenue projections with estimated losses between 11.54% and 17%.
Dr. Don Bruce of the University of Tennessee’s Boyd Center for Business and Economic Research projected a nominal negative growth of minus-1.3% for this fiscal year and a 2.5% growth for 2026.
The changes are all due to policy changes, he said.