DiNapoli: Tax Collections $163 Million Below Projections
Tax collections through November of $39.2 billion were $163.4 million below the state’s estimates updated last month, and $702.4 million below initial estimates in April, State Comptroller Thomas P. DiNapoli said today in releasing the November cash report.
“It is clear that tax collection growth is not going to meet year-end expectations amid a continued slow economic recovery,” DiNapoli said. “While the Division of the Budget is effectively managing cash flow, the upcoming budget proposal needs to include realistic projections for the rest of this year and next so potential cash shortfalls can be addressed effectively.”
The mid-year update to the Financial Plan released November 28 projected tax growth of 2.9 percent for the year. However, All Funds tax collections of $39.2 billion through November rose just 0.4 percent, or $162.3 million, from the same period last year. In order to meet these projections, tax collections will have to grow 6.7 percent in the last four months of the fiscal year.
The mid-year update did not reflect the effects of Superstorm Sandy. The governor’s proposed budget, expected January 22, is anticipated to include projections based on the storm as well as conditions in the economy.
Overall, November’s closing General Fund balance of $2.5 billion was $28 million lower than the latest projections. While receipts were $330.8 million below projections, spending was also $303.1 million below projections.
Other findings from the November Cash Report include:
- General Fund receipts (including transfers from other funds) of $35.9 billion through the first eight months were 1.4 percent, or $479.4 million, higher than receipts from the same period last year. This was $330.8 million lower than Financial Plan projections updated in November.
- General Fund tax collections totaled $26.5 billion, an increase of $173.9 million, or 0.7 percent, from last year for the same period. Collections were $122.9 million lower than the latest projections and $512.9 million lower than initial projections. To meet current year-end projections of 3.5 percent growth, General Fund tax collections will have to increase 8.4 percent in the last four months.
- General Fund Personal Income Tax (PIT) collections through November 30 totaled $17.2 billion and grew 0.5 percent, or $81.6 million, from last year. Year-to-date PIT collections were $42.0 million lower than current projections and $148.0 million lower than initial projections.
- General Fund consumption taxes are basically flat compared to last year, declining $1.2 million to $5.9 billion, or $13.2 million below current projections.
- General Fund sales tax collections grew $15.3 million or 0.3 percent through the first eight months of the fiscal year, compared to the same period last year.
- General Fund business tax collections totaled $2.7 billion through the first eight months of SFY 2012-13, which was $154.8 million more than the same period a year earlier, but $43.8 million less than projections.
- All Funds tax collections of $39.2 billion increased by 0.4 percent, or $162.3 million, from last year, primarily from business tax collections (up $217.6 million). Consumption taxes declined $29.2 million, or 0.3 percent, primarily due to lower cigarette and tobacco tax collections. Other taxes declined $158.8 million, primarily because of lower MTA payroll tax collections resulting from actions taken last December. All Funds Tax collections were $163.4 million less than current projections and $702.4 million below initial projections.
- General Fund spending (including transfers to other funds) of $35.2 billion increased 5.1 percent, or $1.7 billion, from the same period last year. General Fund spending was $303.1 million below projections. Local assistance increased slightly by $18.3 million, or 0.1 percent. General state charges grew $543.3 million from last year, largely due to the timing of payments by agencies. Departmental Operations increased $212.6 million or 4.2 percent compared to last year.
- All Governmental Funds spending declined 3.2 percent, or $2.6 billion, compared to last year, primarily due to $3.0 billion in reduced spending for local assistance that was in part due to higher federal stimulus funding last year. All Funds spending was $673.7 million lower than current projections. Debt service increased $56 million (2.2 percent). Departmental Operations spending increased 1.8 percent, or $219.6 million, compared to the same period last year.
The state’s finances are generally broken down by two main categories: General Fund and All Funds. The General Fund is the major operating fund of the state and accounts for all receipts that are not required by law to be deposited into another fund. All Governmental Funds includes General, Special Revenue, Debt Service and Capital Projects funds, as well as funds from the federal government.