1 / 43

Tennessee’s Economy Is Outpacing the Nation, its Fiscal Condition is Strong

Tennessee’s Economy Is Outpacing the Nation, its Fiscal Condition is Strong. William F. Fox, Director August 29, 2017. The Current Expansion is Long on Historical Standards. August 29, 2017. Potential Policy Effects. Recessions almost always self-inflicted Tax Reform

jamesfwilliams
Download Presentation

Tennessee’s Economy Is Outpacing the Nation, its Fiscal Condition is Strong

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Tennessee’s Economy Is Outpacing the Nation, its Fiscal Condition is Strong William F. Fox, Director August 29, 2017

  2. The Current Expansion is Long on Historical Standards August 29, 2017 William F. Fox • http://cber.haslam.utk.edu

  3. Potential Policy Effects • Recessions almost always self-inflicted • Tax Reform • Infrastructure Investments • Deregulation • Appointment of new FED Chairperson • Health Care Reform • Trade Policy • Government shutdown William F. Fox • http://cber.haslam.utk.edu

  4. GDP Continues to Rise, though Slowly William F. Fox • http://cber.haslam.utk.edu

  5. Consumers are Driving the Expansion William F. Fox • http://cber.haslam.utk.edu

  6. Consumer Debt Balance Rising Again William F. Fox • http://cber.haslam.utk.edu

  7. Creation of Housing Units has Slowed William F. Fox • http://cber.haslam.utk.edu

  8. Housing Sales Rising but Low for an Expansion William F. Fox • http://cber.haslam.utk.edu

  9. Light Vehicles Sales at Expansion Peak, but slowly Falling William F. Fox • http://cber.haslam.utk.edu

  10. E-Commerce Sales are Growing Very Rapidly William F. Fox • http://cber.haslam.utk.edu

  11. E-Commerce altering Local and Taxable Sales August 28, 2017 William F. Fox • http://cber.haslam.utk.edu

  12. U.S. Population Aging Rapidly William F. Fox • http://cber.haslam.utk.edu

  13. Population 65 Years and Older, 2016 U.S. Average: 15.2% Less than 15.0% 15.0% to 16.9% 17.0% to 18.9% 19.0% to 19.7% Greater than 19.7% William F. Fox • http://cber.haslam.utk.edu

  14. Population 65 Years and Older, 2030 U.S. Average: 20.0% Less than 15.0% 15.0% to 16.9% 17.0% to 18.9% 19.0% to 19.7% Greater than 19.7% William F. Fox • http://cber.haslam.utk.edu

  15. College Age Population Slowly Declining as Percent of Total Population William F. Fox • http://cber.haslam.utk.edu

  16. Business Investment was a Drag on the Economy, but Rising Again Now William F. Fox • http://cber.haslam.utk.edu

  17. Deficits Rise Rapidly in the Future (billion) William F. Fox • http://cber.haslam.utk.edu

  18. Aging Society and Interest Costs Raise Federal Spending from 21% to 28% of GDP in 2046 Source: Congressional Budget Office, The 2016 Long-Term Budget Outlook, July 12, 2016, Figure 1.4. William F. Fox • http://cber.haslam.utk.edu

  19. Net Exports of Goods And Services August 29, 2017 William F. Fox • http://cber.haslam.utk.edu

  20. Interest Rates and Inflation are Beginning to Rise William F. Fox • http://cber.haslam.utk.edu

  21. Tennessee’s Economic Momentum Among the Top 10 States Source: State Policy Reports, Vol.34, No. 12. William F. Fox • http://cber.haslam.utk.edu

  22. TN Employment has Grown Faster than the Nation for the past 7 years TN June-17 2.0% U.S. June-17 1.6% William F. Fox • http://cber.haslam.utk.edu

  23. Tennessee Unemployment Rate Historically low and much lower than the US rate William F. Fox • http://cber.haslam.utk.edu

  24. Labor Force Participation Rates Show Signs of a Turnaround Source: Bureau of Labor Statistics. William F. Fox • http://cber.haslam.utk.edu

  25. Full Recovery from the Great Recession in Most Sectors(Tennessee, June 2017 as a Share of December 2007) Source: Bureau of Labor Statistics. William F. Fox • http://cber.haslam.utk.edu

  26. MSA Nonfarm Employment Growth (Quarter Ending June 2016 to June 2017) William F. Fox • http://cber.haslam.utk.edu

  27. TN Per Capita Income has Been Falling as a Percent of the U.S. William F. Fox • http://cber.haslam.utk.edu

  28. Per Capita Income is Lower than the U.S. Average in All But Four Counties Tennessee: $42,094 United States: $48,112 2015 Less than $27,000 $27,000 to $33,250 $33,500 to $40,450 $40,451 to $46,048 Greater than $46,048 William F. Fox • http://cber.haslam.utk.edu

  29. Per Capita Personal Income Falling in Most Parts of the State August 29, 2017 William F. Fox • http://cber.haslam.utk.edu William F. Fox • http://cber.haslam.utk.edu

  30. Tennesseans Have Lower Educational Attainment Levels Bachelor’s degree or higher High school graduates or higher William F. Fox • http://cber.haslam.utk.edu

  31. Tennessee 9th Grade Pipeline William F. Fox • http://cber.haslam.utk.edu

  32. Tennessee Population Growth Fastest around Nashville, 1990–2016 Tennessee: 1.16% United States: .97% Less than 0.00% 0.00% to 0.97% .98% to 1.97% 1.98% to 2.97% Greater or equal to 2.98% *compound annual growth rate William F. Fox • http://cber.haslam.utk.edu

  33. Population Growth has been Suburban, 2010–2016 William F. Fox, Director • cber.haslam.utk.edu

  34. TN S & L Taxes are the Lowest Share of the Economy U.S. =10.6% Tennessee = 8.0% 8.0% or less (1) More than 8.0% to 10.0% (21) 10.0% to 12.9% (25) 13.0% and greater (4) William F. Fox • http://cber.haslam.utk.edu

  35. Tennessee Tax Revenues are Falling Relative to the Economy Tax Revenues (in millions) William F. Fox • http://cber.haslam.utk.edu

  36. TN Tax Revenues Reduced by Tax Cuts • Tax Reductions • Inheritance and gift taxes eliminated - $110 million • Hall Income Tax - $300 million • Sales tax on food - $30 million • Transfer from general to highway fund • Sales tax on food reduced to 4.0 percent - $115 million • Corporate taxes - $115 million William F. Fox • http://cber.haslam.utk.edu

  37. Significant Non-Recurring Revenues Available for this Year • FY16 Surplus $656.4 million • FY17 Surplus $727.4 million • Expense Savings $ 60.0 million • Debt Service Savings $ 83.9 million • Tax legislation - $ 28.0 million Total $ 1.5 billion William F. Fox • http://cber.haslam.utk.edu

  38. Essentially all of the available non-recurring revenues have been allocated • Economic Development $131.0 million • Education $ 58.0 million • Higher Ed $ 17.3 million • Other $ 69.3 million • Retiree Health Care $110.0 million • Transportation $205.6 million • Capital (UTK Engineering) $702.2 million • Rainy Day Fund $132.0 million William F. Fox • http://cber.haslam.utk.edu

  39. TN relies very Heavily on the Sales Tax August 28, 2017 William F. Fox • http://cber.haslam.utk.edu

  40. The Sales Tax is More Volatile than Personal Income Personal Income Growth (%) William F. Fox • http://cber.haslam.utk.edu

  41. University of Tennessee Allocation Above Previous Peak William F. Fox • http://cber.haslam.utk.edu

  42. Board of Regents Allocation Still Below Peak William F. Fox • http://cber.haslam.utk.edu

  43. William F. Fox • http://cber.haslam.utk.edu

More Related