State reports revenue collections surplus in May

PROVIDENCE – The R.I. Department of Revenue collected $7 million more than expected in May, resulting in a 3.2 percent monthly total general revenue surplus compared with the state’s original revenue projections, the department reported Tuesday.

The revenue department took in $224 million in May, when it expected to collect $217 million. The surplus was mainly the result of a 13.4 percent gain in personal income tax revenue compared with state expectations. Rhode Island collected $76.5 million in personal income tax last month, $9 million more than the $67.5 million estimate established at the state’s May 2014 Revenue Estimating Conference.

The May report was the first to use the revised estimates adopted at the May 2014 Revenue Estimating Conference as the basis for comparison with actual revenues. Although the report stated that the new estimates were reduced from the estimates established at the November 2013 Revenue Estimating Conference, the Department of Revenue did not specify by how much.

The personal income tax revenue gain in May, along with a 4.1 percent surplus in sales and use tax revenue, offset losses in departmental receipts, lottery transfer revenue and all other general revenue sources, which fell short of original projections by 11.3 percent, 3.9 percent and 7.1 percent, respectively.

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May represented an improvement over March and February, when the state posted net revenue shortfalls.

“Hopefully, this is indicative of an improving state economy, one in which more people are working and pay levels are rising,” said R.I. Director of Revenue Rosemary Booth Gallogly in the report, but she went on to note that “the lottery transfer continues to lag estimates with the video lottery terminals installed at Twin River and Newport Grand underperforming expectations.”

While the May data indicated revenue exceeded expectations, the fiscal year-to-date revenue data showed the state on course with estimates. Since July 1, 2013, the state has collected $2.77 billion, roughly equal to revenue projections for the 11-month period.

Lottery transfer revenue has shown the largest shortfall in the 11 months between July and May, bringing in $313 million, or $2.1 million less than the $315 million anticipated. Departmental receipts drew two-tenths of a percent less than projected for the fiscal year-to-date, but all other revenue sources have remained on track with or slightly exceeded the state’s estimates.

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