State Revenue Collections Stagnate in October, while Growing 1.3 Percent over Past 4 Months
State tax revenue dipped slightly in October, compared to the same month in 2011, according to data released today by the Department of Revenue. The 0.5 percent drop last month is disappointing, but is nothing to lose any sleep over — yet. Because the numbers fluctuate a bit from month to month, I’m trying (without complete success) to ignore the small decline in October.
The more important figure in the DOR press release is that tax revenue has grown 1.3 percent over the first four months of the 2012-13 fiscal year. That’s okay, but considerably slower than what I was hoping for, and it’s a drop from 2.1 percent growth over the first 3 months .
As we have noted before, the good news with respect to revenue collections is that the state finished 2011-12 with $126 million more tax revenue than had been anticipated. Thanks to that stronger base, General Fund taxes only need to grow by 1.2 percent ($160 million) during the current fiscal year to reach the revenue level projected in May 2012. (See our Sept. 5 blog post.) Although we now seem to be on a pace to hit the 2012-13 target, I’ve been hoping that the better-than-expected end to the last fiscal year would propel revenue collections well past the May estimate for the current year.
Expect much more important and more interesting budget news next week, when we should learn what the Dept. of Administration is now projecting for tax revenue in this fiscal year, and also in the 2013-15 biennium. In addition, that DOA document is likely to compare the revenue projections with the amount of General Fund spending contained in the agency budget requests. Stay tuned for that.