1. William F. Fox, Director Center for Business and Economic Research The University of Tennessee, Knoxville The Economy:As Optimistic as an Economist Can Be, Tax Revenues not so Positive

2.  National Economic Outlook  Tennessee Economy  Tennessee’s Fiscal Outlook William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 2

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5. Occupational Employment and Wages

6. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 6

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8. 8 *

9. June 2014 William F. Fox, Center for Business and Economic Research, http://cber.bus.utk.edu 9

10. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 10 *Sales-taxing states only.

11. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 11

12. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 12

13. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 13

14. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 14

15. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 15

16. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 16

17. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 17

18. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 18

19. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 19

20. NONAG JOB LOSSES AND GAINS

21. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 21 Greater than 2.8% --26— High: ND = 18.6% 1.4% to 2.8% --7-- 0.0% to 1.4% --10— U.S. = 2.8% TN = 1.4% Less than 0.0% --7— Low: AK = -41.7%

22. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 22 Tax Revenues (in millions)

23. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 23

24. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 24

25. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 25 Source: State Tax Notes, Mikesell..

26. Tennessee Sales Tax Collections as a Percent of Personal Income, 1997-2013 William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu

27. 27 Corporate profits with inventory valuation and capital consumption adjustments.

28. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 28

29.  Normal government cost growth ◦ Pension – biannual adjustment ◦ BEP ◦ Higher Ed ◦ Debt Service ◦ Health Insurance ◦ Salary Increase  TennCare ◦ Medicaid expansion ◦ Woodwork effect  Total $580 million William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 29

30.  Gift tax  Inheritance tax  Lower rate for food  Larger exemption for the Hall Income Tax William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 30

31. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 31

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33. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 33

34. William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu 34

35.  5 percentage points more likely to graduate high school than matched control students  20 percentage points more likely to enroll at any college  29 percentage points more likely to enroll in a community college  9.5 percentage points less likely to enroll in a four-year institution  Two-thirds of effect on community college enrollment came from students who would not have gone to college William F. Fox Center for Business and Economic Research http://cber.bus.utk.edu35