DiNapoli: January Revenue Above Revised Projections
But Still Faces Uncertainty
The state's General Fund ended January with a cash balance of $5.6 billion, $885 million above the Division of the Budget's February revised estimate; however, it is $604 million below original projections, according to the January 2011 Cash Report released today by State Comptroller Thomas P. DiNapoli.
"As the state confronts next year's significant budget gap, the current year is still a concern," DiNapoli said. "Since the budget was enacted last August, the Division of the Budget has lowered year-end tax collection projections overall by $1 billion but increased projections for the final two months of the fiscal year. While spending, especially in local assistance, continues to significantly trail projections, it may be related to the timing of payments. The tremendous variances in actual results compared to the Financial Plan projections made within the past few weeks means close monitoring is still critical."
All Funds tax collections for January were $738 million above DOB's February projections. While DOB lowered the January All Funds tax collections estimate by $903 million, they increased the February and March projections by $579 million. This creates year-end pressure if revenues fail to meet projections.
All Funds spending was $968 million below February projections. However, it is unclear how much of this was caused by timing of payments rather than permanent spending reductions. If revenue in the remainder of the year comes in below plan, it could cause a cash crunch and result in additional payment delays and other temporary actions.
Other findings from the January Cash Report include:
- General Fund receipts, including transfers from other funds, were $43.6 billion through January 31, which is 5.1 percent, or $2.1 billion, higher than collections from the same period last year. General Fund receipts were $691.8 million above updated projections.
- General Fund tax collections totaled $32 billion through the first 10 months of the fiscal year. This is an increase of $2.3 billion, or 7.9 percent, from the same period last year. Tax collections were $578.5 million higher than Financial Plan projections released February 1.
- General Fund personal income tax collections through January 31 totaled $20.1 billion and grew 8.9 percent, or $1.6 billion, from the same period last year. Personal Income Tax
collections exceeded updated projections through January 31 by $436.7 million. Withholding collections grew 7.6 percent year-to-date which exceeds the updated year-end projection of 4.5 percent. Conversely, estimated payments have grown 8 percent through January 31, which is on target to achieve year-end projections.
- Consumption and use taxes increased 8.2 percent to $7.4 billion in the General Fund, which is $11.7 million above updated projections. This level of growth is slightly below the year-end projection of 8.5 percent, meaning that consumption tax collections will have to grow 10.1 percent in February and March to reach projections. Sales tax revenues grew 8.6 percent in the first 10 months of the year, which is a positive sign of taxpayer behavior coming out of the holiday shopping season. Growth in sales tax collections is close to the year-end projected growth of 8.9 percent.
- General Fund business tax collections through January 31 of $3.6 billion were $149.9 million, or 4.1 percent, below collections for the same period in SFY 2009-10, which is $49.2 million above updated projections. However, business tax collections need to grow 26.5 percent in February and March to meet the current year-end growth projection of 5.5 percent.
- All Funds receipts of $109.5 billion through January 31 were 6.8 percent, or $7 billion, higher than the same period last year, primarily because of federal receipts, which increased by $3.8 billion, or 10.4 percent. All Funds receipts were $125.6 million higher than Financial Plan projections for the first 10 months, primarily because of tax receipts. Federal receipts were $457.9 million below plan. Miscellaneous receipts were $154.8 million below plan.
- All Funds tax collections of $50.7 billion through the first 10 months of the fiscal year is an increase of 7 percent, or $3.3 billion, from the same period last year, primarily from personal income tax collections, up $1.9 billion, and other taxes, up $528.1 million. All Funds Tax collections through January 31 were $738.3 million above Financial Plan projections.
- General Fund spending through January 31, including transfers to other funds, of $40.3 billion is an increase of .2 percent, or $91.6 million. Local assistance increased $381.9 million, primarily from Medicaid and education. This is offset by departmental operations, which is down 7.9 percent, or $562.1 million, from the same period last year. General Fund spending was $193.1 million below updated Financial Plan projections.
- All Governmental Funds spending through January 31 increased 4.5 percent, or $4.5 billion, which is $968.2 million below updated projections. This year's spending increase is largely the result of Medicaid and school aid payments that were not made last year and was deferred until the first quarter of the current year. Debt service increased 8.1 percent through January 31 while capital spending declined 1.2 percent. Spending for departmental operations declined 2.7 percent or $424.6 million.
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.
To view the January Cash Report, visit here.