The Office of State Budget Director has reported that December’s General Fund receipts were the highest on record as receipts totaled $1,140.1 million.
Revenue collections increased 11.2 percent compared to December of last year, an increase of $114.8 million. Receipts have increased 3.1 percent for the first six months of the fiscal year that ends June 30. Second quarter collections rose 3.2 percent, which is slightly higher than the first quarter total of 2.9 percent.
The official FY18 revenue forecast, which was officially revised by the Consensus Forecasting Group (CFG) on December 15, 2017, calls for 2.3 percent revenue growth. Actual receipts of $5,400 million through the first six months of the fiscal year are only $40 million ahead of the CFG projection. Revenues will need to grow only 1.5 percent for the last six months of the fiscal year to meet the estimate.
Road Fund receipts for December totaled $113.2 million, a 1.5 percent increase from December 2016 levels. Year-to-date receipts have fallen 0.4 percent. The official revenue estimate calls for a 0.3 percent decline for the fiscal year and receipts can decline 0.2 percent over the remainder of the fiscal year and still meet the estimate.
While State Budget Director John Chilton was pleased with the growth in General Fund receipts, he acknowledged some concern that there may be extra volatility to this year’s monthly receipts.
“The concern with a very large month of tax receipts is that what appears to be actual growth could be merely an acceleration of revenue that would have been realized in later months of the fiscal year. Federal tax law changes in late December that limit the federal deductibility of state and local income and property tax payments in 2018 could have prompted some taxpayers to send estimated tax payments prior to the end of the calendar year.
“The acceleration of those payments could have swelled the income tax coffers in December. In another tax account, property tax revenue, which is typically volatile within the year, rose 33.3 percent in December but is up only 5.5% year-to-date. As noted, individual taxpayers may have accelerated property tax payments in response to the federal income tax changes…Overall, December’s strong growth is certainly encouraging and seems to be consistent with the recent estimates by the Consensus Forecasting Group, but the fiscal year is only half over.”
Among the major accounts:
• Sales and use tax receipts rose 3.0 percent in December and have increased 2.7 percent for the year.
• Corporation income tax receipts increased 18.9 percent and are up 1.3 percent for the year.
• Individual income tax collections rose 14.2 percent in December on the strength of withholding and estimated tax receipts. Year-to-date collections in this account have increased 3.6 percent.
• Property tax collections rose 33.3 percent and are up 5.5 percent for the year.
• Cigarette tax receipts increased 9.2 percent in December. For the first six months of the year, collections have decreased 4.9 percent.
• Coal severance tax receipts decreased 18.9 percent in December and have fallen 6.8 percent for the year.
Road Fund receipts rose 1.5 percent, or $1.7 million, in December. Receipts for the month were $113.2 million compared to $111.5 last December. Receipts have declined 0.4 percent through the first six months of the year. Second Quarter collections fell 0.3 percent after falling 0.5 percent in the first quarter.
The CFG’s official Road Fund estimates call for a decrease in revenues of 0.3 percent for the fiscal year. Based on year-to-date tax collections, revenues can decline 0.2 percent for the remainder of FY18 to meet the estimate.
Among the Road Fund accounts, motor fuels receipts fell 1.2 percent in December, and are down 0.5 percent for the first six months. Motor vehicle usage revenue rose 2.4 percent in December but has decreased 1.3 percent year-to-date. License and privilege receipts decreased 6.0 percent for the month but are up 0.6 percent for the year.
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