Tennessee tax collections in September fell 8.2 percent below year-ago levels as the slowing economy reduced sales and corporate income tax revenues, the state Department of Finance and Administration said today.

September collections totaled $976.7 million, or $85.5 million less than what was budgeted. Last month was the second consecutive month this fiscal year in which tax collections were below last year.

"We are disappointed, but we'll continue to monitor expenditures very closely, as we are determined to keep the state's budget in balance for the duration of current national conditions,” Finance and Administration Commissioner Dave Goetz said in a prepared statement today.

"We've seen economic conditions deteriorate since November of 2007, as collections have come in under the budgeted estimate for the past 10 consecutive months," Mr. Goetz said.

In response to the budget shortfall, the state has directed department heads to cut a total of $235.5 million from the current budget and prepare for another 3 percent reduction in the 2009-2010 budget year.

September sales tax collections were down by 3.4 percent; franchise and excise taxes combined were down 17.35 percent and gasoline and fuel tax collections were off nearly 11.8 percent from year-ago levels, the state reported.

For complete details, see tomorrow’s Chattanooga Times Free Press.

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