1. William F. Fox, Director August 29, 2017
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
8/16/2017
Where we are today = June 2009-March 2017
August 29, 2017
August 29, 2017
William F. Fox •

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
August 29, 2017
William F. Fox •

4. GDP Continues to Rise, though Slowly
FRED Series: GDPC1
Updated 8/1/2017
August 29, 2017
William F. Fox •

5. Consumers are Driving the Expansion
BEA: Updated 8/16/2017
August 29, 2017
William F. Fox •

6. Consumer Debt Balance Rising Again
8/17/2017—through 2017q2
New York Fed
FILE
DATA HUB:
August 29, 2017
William F. Fox •

7. Creation of Housing Units has Slowed
8/22/2017 (2017 is first two quarters of the year); data revised
Source: Current Population Survey, Series H-111, Bureau of the Census, Washington, DC 20233
Estimates were revised in 2017, but only back to 2000.
August 29, 2017
William F. Fox •

8. Housing Sales Rising but Low for an Expansion
8/22/2017; HUESOLD, HUSPS; levels; AUG17 IHS short-term forecast bank
EXHOSLUSA495S
HOUST Fred
Global Insight Baseline for current year
August 29, 2017
William F. Fox •

9. Light Vehicles Sales at Expansion Peak, but slowly Falling
8/12/17; SUVLV; level; FRED series: ALTSALES
August 29, 2017
William F. Fox •

10. E-Commerce Sales are Growing Very Rapidly
August 29, 2017
William F. Fox •

11. E-Commerce altering Local and Taxable Sales
updated: 8/23/2017
NOTE: Final version of chart will be year-over-year growth, FY2017 over FY2016, when June Revenue report becomes available
Broad growth in retail sales across a range of categories.
Sales tax growth is driven by durables (Furniture & Home Furnishings and Building Materials)
Online sales impact (i.e. Amazon included in Misc. Retail Stores, subcategory of Catalog sales) demonstrating growth beyond 1st year
__________________________
TOTAL NON-RETAIL, NON-SERVICE:
AGRICULTURE, FORESTRY, FISHING
MINING
CONSTRUCTION
MANUFACTURING
TRANSPORTATION
COMMUNICATIONS
ELECTRIC, GAS & SANITARY SERVICES
WHOLESALE TRADE
FINANCE, INSURANCE, REAL ESTATE
March 22, 2017
August 28, 2017
William F. Fox •

12. U.S. Population Aging Rapidly
Updated 7/27/2017 Woods & Poole
August 29, 2017
William F. Fox •

13. Population 65 Years and Older, 2016
U.S. Average: 15.2%
Less than 15.0%
15.0% to 16.9%
Woods & Poole Updated 7/20/2017
17.0% to 18.9%
19.0% to 19.7%
Greater than 19.7%
August 29, 2017
William F. Fox •

14. Population 65 Years and Older, 2030
U.S. Average: 20.0%
Less than 15.0%
15.0% to 16.9%
Woods & Poole Updated 7/27/2017
17.0% to 18.9%
19.0% to 19.7%
Greater than 19.7%
August 29, 2017
William F. Fox •

15. College Age Population Slowly Declining as Percent of Total Population
3/16/2017
Where we are today = June 2009-March 2017
August 29, 2017
William F. Fox •

16. Business Investment was a Drag on the Economy, but Rising Again Now
8/2/2017;
GPDIC1 from FRED
3-quarter moving average
August 29, 2017
William F. Fox •

17. Deficits Rise Rapidly in the Future (billion)
August 29, 2017
William F. Fox •

18. William F. Fox • http://cber.haslam.utk.edu
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.
August 29, 2017
William F. Fox •

19. Net Exports of Goods And Services
8/14/2017; netxr; August17 IHS, Inc.
FRED series: NETEXC
August 29, 2017
August 29, 2017
William F. Fox •

20. Interest Rates and Inflation are Beginning to Rise
IHS series RMFF, CPI; CPI is charted as yr-over-yr growth
08/12/2017
August 29, 2017
William F. Fox •

21. Tennessee’s Economic Momentum Among the Top 10 States
Index ranks states based on their most recent performance in 3 key measures of economic vitality:
personal income growth, employment growth and population growth.
Source: State Policy Reports, Vol.34, No. 12.
August 29, 2017
William F. Fox •

22. TN Employment has Grown Faster than the Nation for the past 7 years
June-17
2.0%
U.S.
June-17
1.6%
BLS 08/02/2017
August 29, 2017
William F. Fox •

23. William F. Fox • http://cber.haslam.utk.edu
Tennessee Unemployment Rate Historically low and much lower than the US rate
BLS 08/02/2017
August 29, 2017
William F. Fox •

24. Labor Force Participation Rates Show Signs of a Turnaround
8/24/17; S:\allusers\DATA\BLS State LF Part Rate\TN LABORFORCE BLS.WF1 (eviews workfile)
Source: Bureau of Labor Statistics.
August 29, 2017
William F. Fox •

25. William F. Fox • http://cber.haslam.utk.edu
Full Recovery from the Great Recession in Most Sectors (Tennessee, June 2017 as a Share of December 2007)
08/02/2017; current to recession peak
Source: Bureau of Labor Statistics.
August 29, 2017
William F. Fox •

26. MSA Nonfarm Employment Growth (Quarter Ending June 2016 to June 2017)
08/02/2017; BLS
FRED series: TNNA CHAT847NA CLEV447NA CLHNA JACNA JOHN747NA KING747NA KNOX947NA MORR147NA MPHNA NASH947NA
August 29, 2017
William F. Fox •

27. TN Per Capita Income has Been Falling as a Percent of the U.S.
8/02/ is most recent data
BEA
August 29, 2017
William F. Fox •

28. William F. Fox • http://cber.haslam.utk.edu
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
01/21/16; current dollars. !! entire county personal income series revised back to 1969 !!
2015 is most recent county-level per capita personal income data (checked BEA 08/02/2017)
$40,451 to $46,048
Greater than $46,048
August 29, 2017
William F. Fox •

29. Per Capita Personal Income Falling in Most Parts of the State
8/2/17; is most recent msa level data. (checked 08/02/2017)
August 29, 2017
William F. Fox •
August 29, 2017
William F. Fox •

30. Tennesseans Have Lower Educational Attainment Levels
High school graduates or higher
Bachelor’s degree or higher
2015 is latest census. 08/03/2017
August 29, 2017
William F. Fox •

31. Tennessee 9th Grade Pipeline
3/16/2017
Where we are today = June 2009-March 2017
August 29, 2017
William F. Fox •

32. Tennessee Population Growth Fastest around Nashville, 1990–2016
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%
08/18/2017
*compound annual growth rate
August 29, 2017
William F. Fox •

33. Population Growth has been Suburban, 2010–2016
From S:\CONTRACT\CUNNINGHAM\FOX\2015\PPT\CNTY MSA LABOR FORCE.xlsx
2016 is most recent county pop; 2017 county pop estimates not yet available (08/16/2017)
August 28, 2017
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)
8/22/2017
More than 8.0% to 10.0% (21)
10.0% to 12.9% (25)
13.0% and greater (4)
August 29, 2017
William F. Fox •

35. Tennessee Tax Revenues are Falling Relative to the Economy
Tax Revenues (in millions)
*Total includes earmarked;
updated 08/18/17 using data from TAXCOLL.xlsx dated July2017
quarterly PI from BEA and CBER ERG2017 forecast converted to fiscal years
August 29, 2017
William F. Fox •

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
August 29, 2017
William F. Fox •

37. Significant Non-Recurring Revenues Available for this Year
FY16 Surplus $656.4 million
FY17 Surplus $727.4 million
Expense Savings $ million
Debt Service Savings $ million
Tax legislation $ million
Total $ 1.5 billion
August 29, 2017
William F. Fox •

38. William F. Fox • http://cber.haslam.utk.edu
Essentially all of the available non-recurring revenues have been allocated
Economic Development $131.0 million
Education $ million
Higher Ed $ million
Other $ million
Retiree Health Care $110.0 million
Transportation $205.6 million
Capital (UTK Engineering) $702.2 million
Rainy Day Fund $132.0 million
August 29, 2017
William F. Fox •

39. TN relies very Heavily on the Sales Tax
8/25/2017;
March 22, 2017
August 28, 2017
William F. Fox •

40. The Sales Tax is More Volatile than Personal Income
Personal Income Growth (%)
Total includes earmarked
Fox Taxcol spreadsheet
Fred: TNOPER
TNOPER does not include 2017 quarter 2
August 29, 2017
William F. Fox •

41. University of Tennessee Allocation Above Previous Peak
Tennessee Budget Documents (FY17 & FY18 from Budget Document FY18) 8/23/2017
Year 2017 is estimated
Year 2018 is recommended
August 29, 2017
William F. Fox •

42. Board of Regents Allocation Still Below Peak
Tennessee Budget Documents (FY16 & FY17 from Budget Document FY17) 8/23/2017
Year 2017 is estimated
Year 2018 is recommended
August 29, 2017
William F. Fox •

43. William F. Fox • http://cber.haslam.utk.edu
August 29, 2017
William F. Fox •