DOR Announces $126 Million More Revenue than Projected for 2011-12
Increased Revenue Boosts Rainy Day Fund and Closing Balance, and Should Lessen Need for Cuts in Next Biennium
The state got some good budget news Wednesday when the Department of Revenue reported its preliminary tax collection totals for the 2011-12 fiscal year. The total of a little over $13.5 billion of General Fund taxes is $126.6 million (0.9%) above the department’s last projections for the biennium, which were made in May of this year.
Half of the $126 million increase will be contributed to the Rainy Day Fund, and the other half will add to the General Fund balance at the end of FY 2011-12 (and to the projected balance at the end of the current biennium – which before today’s news was last estimated to be about $211 million). However, the amount by which it increases the balance will also depend on changes in spending that have yet to be factored into the mix.
I think the most encouraging aspect of the new DOR numbers is that the $13.5 billion tax collection figure for 2011-12 is only about $160 million (1.2%) below the May projection for the new fiscal year (2012-13). That suggests that the chances are very good of finishing the current fiscal year well above the May estimate, which would further increase both the closing balance and the Rainy Day Fund. And, more importantly, a higher revenue figure in the second year of a biennium establishes a higher revenue baseline for the next biennium, which would be a very positive development.
The 2011-12 tax total is 4.7% above the GPR tax collections in the prior year. Although excise taxes declined slightly in 2011-12, sales tax revenue was up 4.4%, and individual income tax revenue grew by 5.1%. Corporate income taxes, which now comprise 6.7% of total General Fund taxes, grew by 6.3%.
A short Legislative Fiscal Bureau memo compares the new DOR figures with the department’s May projections. We’ll take a closer look at the 2011-12 budget and closing balance in mid-October, when the Department of Administration releases its Annual Fiscal Report.