State Revenue Behind Budget Projections
October 20, 2016
The latest Department of Finance report shows mixed news on state revenues, but the trend is below projections by a small margin. Overall, the monthly General Fund revenues are $32 million, or 0.3 percent, below budget and the year-to-date revenues are $217 million, or 0.9 percent, below budget.
General economic indicators, such as real estate and construction activity, are trending positively but slowly. As the fiscal year continues to move along, with an election and a new legislative session on the horizon, the status of the state’s General Fund will become increasingly important.
Personal income taxes are tracking 1.8 percent ($124 million) above budget for the month, and 1.3 percent ($212 million) above budget year-to-date. This additional revenue means that an additional $2 million will be transferred to the Mental Health Services Fund under the formula set by Proposition 63. Insurance taxes were also significantly (106.1 percent, or $94 million) higher than expected for the month, due mostly to the timing of a quarterly payment; still, year-to-date insurance taxes are also beating expectations by 12.3 percent ($69 million). Tobacco taxes and “other” General Fund revenue sources are tracking above budget as well.
However, not all revenues are faring so well. Sales and use tax receipts were 3.4 percent ($70 million) below the monthly budget, and continue to lag year-to-date projections by $221 million (3.6 percent). Corporation taxes were also much lower than expected for the month, coming in short by $181 million – a shortfall of over 15 percent. Year-to-date, revenue from corporation taxes is 17.7 percent lower than budget projections.