OBM’s preliminary revenue report for May show a continuing slump in personal income tax receipts and a sizeable hit to sales tax intake compared to the agency’s estimates as revised several months ago. Total tax receipts for the month were nearly $165 million, or 10.7%, less than projected as of the end of the last calendar year. OBM reported that year-to-date tax collections totaling $15.66 billion were $706 million, or 4.3%, below those revised estimates. The biggest shortfall areas in May were in sales taxes, which were $86.6 million, or 13.6%, off the mark, and personal income taxes, which came in $64.7 million, or also 13.6%, behind schedule. Most other state tax categories also failed to meet OBM expectations for the month. Underscoring policymaker concerns about the economy and partially reflecting the impacts of tax cuts enacted several years ago, through 11 months of fiscal year 2009 the state has collected a whopping $1.88 billion, or 10.7%, less in tax revenues than it did over the same period in the last fiscal year. While the monthly revenue report reflects a continuation of the historically bad performances for state tax receipts this year, OBM had recently updated its gloomy projections to account for the severe slump. Policymakers have said the current fiscal year shortfall will be addressed with a year-end transfer from the “rainy day” Budget Stabilization Fund. Nevertheless, the FY 2009 shortfall complicated budget talks on the upcoming biennium spending plan (HB 1) because the administration had already earmarked most of the BSF money for allocations in the next biennium.
For more information contact Beth Vanderkooi.