January 18, 2013
DiNapoli: State Tax Revenues Up, But Still Lag Projections
Tax collections through December totaling $46.4 billion were $48.3 million below the state’s latest estimates and $685.3 million below initial estimates in April. Higher than anticipated personal income tax (PIT) collections in December likely reflect income paid before federal tax increases take effect in 2013 for high income taxpayers, New York State Comptroller Thomas P. DiNapoli said today in releasing the December cash report.
“Tax collections are still not growing at the rate needed to meet year-end projections, and the boost in personal income taxes in December likely won’t continue,” DiNapoli said. “So far the budget has been balanced by spending less and taking advantage of one-time windfalls. With the budget process about to begin again, revenue projections should be realistic so that the budget is not balanced with revenues that won’t be there.”
The Mid-Year Update to the Financial Plan released by the Division of the Budget on Nov. 28 projected tax growth of 2.9 percent for the year. However, even with higher than anticipated PIT collections in December, All Funds tax collections of $46.4 billion rose just 1.2 percent, or $545.4 million, from the same period last year. In order to meet current year-end projections, tax collections will have to grow 7.1 percent in the last three months of the fiscal year. Current projections also do not include estimates of the potential budgetary effects of Hurricane Sandy. Revised projections are expected to be included in the Executive Budget due to be released Tuesday.
The General Fund balance at the end December was $4.6 billion, $681.8 million higher than projections. However, a $2.5 billion School Tax Relief (STAR) payment was delayed from December to January. Had that payment been made as scheduled, the General Fund would have ended the month at $2.1 billion. Receipts for the year to date were $308.7 million below projections, and spending was $990.8 million below projections, primarily in local assistance grants.
Other findings from the December Cash Report include:
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.
he December cash report can be found at: http://www.osc.state.ny.us/finance/finreports/cash/monthly/december12.pdf