DiNapoli: February Tax Collections Results Mixed
Tax collections within the General Fund were only $14 million below the Division of the Budget's March 3 projections. However, as has been the case throughout the year, business tax collections will have to increase substantially in the next month to meet year-end projections, according to the February Cash Report release today by State Comptroller Thomas P. DiNapoli.
"The budget process is progressing but difficult decisions have yet to be made," DiNapoli said. "The cash report shows the assumptions used to build last year's budget have proved overly optimistic. The Division of the Budget lowered year-end tax projections by more than $1 billion since the budget was enacted. It is imperative that responsible and reasonable projections be used in the final product for 2011-12. We must break the cycle of patching year-end shortfalls with delayed payments and one-shot revenue sources."
The state's General Fund ended February with a cash balance of $6.4 billion, $1 million above DOB's latest estimate from March 3. All Funds tax collections were $18.2 million below DOB's latest projections. DOB slightly increased projections for All Funds tax collections from the Financial Plan released in February. All Funds tax collections are now expected to end the year more than $1 billion below initial projections from August 2010.
All Funds spending was $58.2 million below the latest projections. However, it is unclear how much of this is caused by timing of payments rather than permanent spending reductions. DOB lowered year-end spending projections by $417 million in the latest Financial Plan update released with the 30-day amendments. All Funds disbursements are now expected to end the year $227 million higher than initially projected in August.
Other findings from the February Cash Report include:
- General Fund receipts (including transfers from other funds) of $47 billion through February 28 were 3.9 percent, or $1.7 billion, higher than collections from the same period last year. General Fund receipts were $6.7 million below updated projections.
- General Fund tax collections totaled $34.8 billion through the first 11 months of the fiscal year. This is an increase of $2.2 billion, or 6.6 percent, from the same period last year. Tax collections were $14 million below than Financial Plan projections released March 3.
- General Fund personal income tax collections through February 28 totaled $22 billion and grew 6.2 percent, or $1.3 billion, from the same period last year. Personal Income Tax collections were $6.6 million below updated projections through February 28. Withholding collections have grown 5.6 percent year-to-date which exceeds the updated year-end projection of 4.3 percent. Estimated payments grew 7.9 percent through February 28, which is on target to achieve year-end projections.
- Consumption and use taxes increased 8.2 percent to nearly $8 billion in the General Fund, which is $8.3 million below 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 11.1 percent in March to reach projections. Sales tax has grown 8.7 percent for the first 11 months of the year. Growth in sales tax collections is close to the year-end projected growth of 8.9 percent.
- General Fund business tax collections through February 28 of $3.7 billion were $68.9 million, or 1.8 percent, below collections for the same period in SFY 2009-10, which is $3.9 million above updated projections. However, business tax collections need to grow 22.2 percent in March to meet the current year-end growth projection of 5.5 percent.
- All Funds receipts of $119.5 billion through February 28 were 6.2 percent, or $7 billion, higher than the same period last year, primarily because of federal receipts, which increased $3.9 billion, or 9.8 percent. All Funds receipts were $50 million lower than Financial Plan projections for the first 11 months, primarily because of miscellaneous receipts. Federal receipts were less than $1 million below plan. Miscellaneous receipts were $31.3 million below plan.
- All Funds tax collections of $54.8 billion through the first 11 months of the fiscal year increased by 5.8 percent, or $3 billion, from the same period last year, primarily from personal income tax collections (up $1.5 billion), consumption and use taxes (up $1.1 billion) and other taxes (up $553.3 million). All Funds Tax collections through February 28 were $18.2 million below Financial Plan projections.
- General Fund spending through February 28 (including transfers to other funds) of $42.9 billion is an increase of 0.5 percent, or $218.4 million. Local assistance increased $301.8 million (primarily from Medicaid and education). This is offset by departmental operations, which is down 7.2 percent or $554.8 million from the same period last year. General Fund spending was $8 million below updated Financial Plan projections.
- All Governmental Funds spending through February 28 increased 3.8 percent, or $4.1 billion, which is $58.2 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 deferred until the first quarter of the current year. Debt service increased 6 percent through February 28 while capital spending declined 2.7 percent. Spending for departmental operations declined 2.2 percent or $392.1 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 February Cash Report, visit: http://www.osc.state.ny.us/finance/finreports/cash/monthly/february11.pdf.