CSAC Bulletin Article

February’s State Cash Flow Misses Expectations

March 16, 2017

In Department of Finance’s latest monthly cash flow report, returns for the month of February are disappointing, given that the “big three” revenue sources all came in short of budget projections. Overall, February revenues were $256 million below what the budget anticipated, causing year-to-date performance to suffer.

Of the “big three” revenue sources, corporation taxes took the largest hit percentage-wise, falling 29.6 percent below budget projections for the month of February. Sales and use tax also experienced a sizeable set-back, coming in $166 million, or 8.4 percent, below projections. However, the shortfall, according to the Legislative Analyst, may reflect some one-time issues related to the timing of revenue receipts. Lastly, personal income tax revenues are lagging $50 million, or 1.8 percent, behind projections which the Legislative Analyst explains could be due to the fact that its refund season.

Year-to-date, collections from personal income tax are down $259 million, or 0.5%. Collections from sales and uses tax are down $226 million, or 1.3%. Corporation taxes are still above year-to-date projections, but not by much in comparison to this time last month.

As we edge closer toward the May Revise, CSAC will continue to closely monitor all that will factor into the Governor’s final budget decisions and keep counties apprised to any new updates.

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