Revenue Report Includes Some Surprises
In addition to the state’s major revenue sources -- the income tax, the sales tax, the meals and rooms tax and the corporate income tax -- there are many other taxes that provide money to the General Fund.
If you look at it last year at this time, it is ten, twelve percent up so we are still climbing which is I think the important news - Deputy Finance Commissioner Susan Zeller
There’s the liquor and wine tax, the insurance premium tax, the telephone gross receipts tax, the property transfer tax, the bank franchise tax and the inheritance tax.
Susan Zeller is the Deputy Commissioner of the Department of Finance and Management. She says she keeps a close watch on the personal income tax and there’s a good reason why
“You’ll see that it is certainly the largest component. It represents 50 percent but it’s also concentrated into a few months,” said Zeller. “We live, breathe and die by March and April although some of that’s been moving into February because of the electronic filing.”
The sales tax and the meals and rooms tax are considered to be relatively good barometers of consumer confidence. Zeller says receipts from the sales tax have been growing very slowly, while the meals and rooms tax is doing much better.
“So what’s the explanation for that? People are still going out to dinner, they’re comfortable enough to go back out to dinner,” said Zeller. “But maybe they’re still a little conservative with going out and buying bigger ticket items.”
The revenue report compares the performance of the various tax sources to the same period last year, and to a revenue target established by state economists.
Zeller says July revenues are slightly below the target goal but she says the year to year growth is substantial.
“If you look at it last year at this time, it’s ten, twelve percent up so we’re still climbing which is I think the important news rather than an estimate of what the month would be,” said Zeller. “Look at how much more we brought in in revenue this July versus last July."
Most revenue reports include a disclaimer that it’s a mistake to draw major conclusions from the results of just one month. Zeller says July’s report is a perfect example of this philosophy.
“July is a funny, weird, little month. Some years it’s way up and some years it’s way down and it’s a volatile little month,” said Zeller. “And that is in part because of the push to get everything in, not just by us, but by payers of revenue to us, by the end of June 30th because that’s the end of the fiscal year.”
The biggest surprise of the July report is the enormous amount of money the state collected in the inheritance tax. Zeller says the state was expecting just under a million dollars but the actual amount was almost $9 million.
Zeller says it’s a good example of how difficult it can be to accurately predict how much money the state will raise in any one month period.