Gov. Bill Haslam said he is surprised by revenue estimates from local economists who predict the state could expect up to 4 percent growth in the next budget cycle.
In a rare appearance, Haslam joined the State Funding Board on Capitol Hill Friday to hear experts forecast tax collections used to map out next year’s roughly $31.5 billion state spending plan.
Haslam said statistics from the economists were “a little more encouraging than I was expecting, to be honest. The economy feels a little more nervous out there than what the statistics were showing.”
“To me, it just doesn’t feel like we’re growing that fast when I talk to businesses out there,” he told reporters after he left the State Funding Board meeting Friday, adding that his evidence is anecdotal next to economists’ statistics.
Economics professor William Fox predicted the nearly 6 percent job growth in the construction industry is a good sign of the state’s recovery. He predicted 4 percent growth in sales tax collections, which includes a 2 percent increase in real economic growth and a 2 percent climb in inflation.
Another economic expert told the board he expects economic recovery in the state to remain “painfully slow” and said state leaders should plan for modest 2 percent economic growth to become the new normal.
“I hate to use the term slog,” said Lee Jones, vice president and regional executive for the Federal Reserve Bank of Atlanta’s Nashville branch who predicted “slow, steady improvement.”
Four economists offered their predictions to the State Funding Board Friday. The panel, which includes the governor, treasurer, secretary of state, comptroller, and the Department of Finance and Administration commissioner will meet again Wednesday to settle on an estimate they’ll use to predict revenue growth for 2013 and part of 2014.
So far this budget year, taxpayers have handed over $51.6 million more in taxes and revenue than officials predicted a year ago. The budget year runs from July 1, 2012, to June 30, 2013.
The meeting was the first Haslam had attended since he took office two years ago, although his predecessors were also a rarity at the meetings.
“I just literally had an afternoon where I had a couple hours free,” he said, adding he wanted a chance to hear from the economists themselves.