MAY 2018
June 01, 2018 | Revenue & Economic Update
In December, the Independent Fiscal Office (IFO) released an update of the fiscal year (FY) 2017-18 official revenue estimate (originally published in June 2017) and corresponding revised monthly projections.1 For the month of May, General Fund collections were $197 million (-7.4 percent) below estimate but are roughly meeting estimate for the fiscal year.
Overall sales and use tax revenues exceeded estimate by $50 million. Collections from motor vehicle and non-motor vehicle sales tax were over estimate by $10 million and $39 million, respectively.
Personal income tax (PIT) May collections were $10 million above estimate. Monthly withholding ($10 million) and annual ($2 million) payments more than offset quarterly payments (-$2 million), which were below estimate. For the fiscal year, PIT collections are $127 million above estimate. Overages in quarterly ($149 million) and withholding ($56 million) payments for the fiscal year are partially offset by a shortfall in annual payments (-$78 million).
Corporate net income tax (CNIT) payments were below estimate by $65 million (-19.6 percent) in May. The entire shortfall was attributable to final payments, which were under estimate by $67 million. Overall, CNIT final payments received in April through May have been weak. A material part of that shortfall is likely due to profit shifting out of tax year 2017 in response to the significant federal corporate rate reduction in December 2017. For the fiscal year, CNIT revenues are $167 million below estimate, driven by final payments, which are $186 million below estimate for the year.
Non-tax revenues were $195 million below estimate in May, primarily due to timing of transfer payments. The official estimate assumed special fund transfers ($150 million) would be received in May. However, those transfers were received earlier in the year, and are incorporated into fiscal year-to-date (FYTD) receipts. Escheat collections were $32 million below estimate for the month and are $128 million below estimate for the fiscal year-to-date.
Although the FYTD IFO estimate is within $25 million of actual revenues, the June monthly estimate includes a $200 million transfer from the JUA (per Act 44) that will not be received. This will cause a significant non-tax shortfall in the last month of the fiscal year.