September 2018

October 01, 2018 | Revenue & Economic Update

On July 30th, the Independent Fiscal Office (IFO) released monthly revenue projections for fiscal year (FY) 2018-19.1 General Fund collections were $137.8 million (4.7 percent) above estimate for September and $204.3 million (2.8 percent) above estimate for the fiscal year-to-date (FYTD). General Fund collections for September were above estimate primarily due to overages in corporate net income tax (CNIT), sales and use tax (SUT) and non-tax collections.

September CNIT collections were above estimate ($96.3 million) due to higher than anticipated estimated ($49.8 million) and final payments ($46.5 million). Total FYTD CNIT collections are significantly above estimate ($121.7 million) due to broad strength in estimated payments (tax year 2018) and unusually large settlement payments from older tax years.

Monthly SUT collections were above estimate ($25.5 million). The overage was due to non-motor vehicle collections ($31.5 million), while motor vehicle collections were below estimate (-$6.0 million). Fiscal-year-to-date SUT collections are over estimate ($80.3 million), largely due to strong non-motor vehicle collections ($66.1 million).

Personal income tax (PIT) collections for September came in below estimate (-$9.6 million), attributable to lower than anticipated quarterly collections (-$14.4 million). Total FYTD PIT collections are below estimate (-$12.2 million) due to quarterly (-$7.3 million) and withholding (-$7.7 million) payments that were partially offset by annual payments ($2.8 million).

Non-tax collections were above estimate ($34.1 million) for September, primarily due to lower than expected escheat payments to property owners. These payments were impacted by delayed processing and lower overall claims for property. To the extent that payments to holders were delayed, they are expected to rebound in October.

Although FYTD General Fund collections are above estimate, it is too early to extrapolate those gains forward to the rest of the fiscal year. The IFO does not anticipate that the first quarter growth in CNIT (31.6%) and SUT (8.9%) revenues can be sustained for the remainder of the fiscal year. 

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