(C) Tennessee Lookout
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Analysis: Nashville, Willamson and Sevier's prop up of Tennessee's tax base – Tennessee Lookout [1]
['Adam Friedman', 'More From Author', '- October']
Date: 2023-10-16
Three Tennessee counties subsidize a significant portion of the state’s tax collection, sending in more than double the dollars they receive, an analysis of legislative spending and state budget data from 2023 shows.
Tennessee’s Office of Legislative Budget Analysis released its county-by-county reports last month, spanning from July 1, 2022 to June 30, 2023, and showed the state spent $18.4 billion across the 95 counties.
But, the distribution is not equal. A Lookout analysis of various tax collections over the same period found the state collected $5.7 billion in Nashville-Davidson, Sevier and Williamson counties, with those communities receiving $2.3 billion back, a difference of $3.4 billion.
Tennessee’s tax system — with no income tax — relies heavily on sales taxes to fund its various functions. This creates a system where communities with larger populations and high tourism contribute more to state coffers.
But the highest generators are only sometimes the ones losing out the most. In Shelby County, Tennessee’s largest, the state spends about the same amount it collects because of costs related to TennCare.
Tennessee’s legislative budget office has tracked state spending in each county since at least 2012, but there are better ways to see the impact than following exact dollar amounts.
This is because that state almost always collects more local taxes than it sends back to the counties to put money in its rainy day account and fund programs that don’t impact a specific county.
Instead, the Lookout’s analysis examined the percentage of contributions and distributions, showing that 14 counties contribute more taxes than they receive back. On the flip side, 50 counties receive 50% or more money from the state than they contribute.
A Lookout analysis of the same data in 2022 found 16 Tennessee counties propping up the other 79.
The legislative office’s county-by-county reports track spending in 32 categories. TennCare, education, prisons and state employee retirement payments are often the largest state-funded portions.
Bledsoe, Lake, Trousdale, Morgan and Johnson were the five counties that benefited the most from this tax distribution system because of state prison spending, which provides government-funded jobs.
Methodology
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[1] Url:
https://tennesseelookout.com/2023/10/16/analysis-nashville-willamson-and-seviers-3-4b-prop-up-of-tennessees-tax-base/
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