According to Stephen P. McAllister, state budget officer, general revenue collections have totaled $871.4 million for the first half of the fiscal year – July 1998 through Dec. 1998. That figure represents a 6.7 percent increase over collections for the same period a year ago. However, a portion of the gain is attributable to returns from the inheritance tax, according to McAllister.
Of the $28.4 million year to date collections, $11.5 million represent a Fiscal Year 1998 receivable. In addition, a misposting occurred with the Business Corporations tax, resulting in the overstatement of revenues by $2.7 million. The Revenue Estimating Conference convened on Nov. 9, 1998 to revise Fiscal Year 1999 revenue estimates.
McAllister draws a direct correlation between a strong economy – and strong tax collections.
”Overall, the economy remains strong,” said McAllister. “More people are working – the withholding taxes are up. The sales tax is up, so people are still buying goods.”
McAllister also said that the numbers illustrate activity on the stock market. As required by tax law, said McAllister, people are making payments on estimated gains. A breakdown of the revenue collections to date, according to the state budget office shows that:
Total tax revenues through December have increased 6.5 percent over the same period last year.
Personal income tax revenue exceeds the level reached during the prior fiscal year. Year to date growth equals 5.8 percent. The Fiscal Year 1999 revised estimate of 4.9 percent annual growth reflects a further reduction in the rate of this tax which became effective on Jan. 1, 1999.
Business corporations tax revenues through the end of December are 7.6 percent lower than the prior year to date. Adjusted for a misposting in this account, receipts are 25.6 lower than the first six months of Fiscal Year 1998, which ran from July 1997 to Jan. 1, 1998. While the revised estimate anticipates an annual reduction of 2.2 percent, receipt flows during the early part of the fiscal year represent a very small percentage of anticipated collections and do not provide meaningful trend information.
Sales and use tax collections this fiscal year are 5.5 percent greater than Fiscal Year 1998 collections during the comparable. The annual estimate is based upon 6.5 percent growth for the year.
Cigarette tax revenues through the end of December are 4.1 percent less than the same period last year. However, the rate increase which took effect on July, 1, 1997 resulted in the collection of a floor stock tax in the early part of the prior fiscal year. The revised estimate anticipates an annual reduction of 0.8 percent.
Inheritance tax cash collections have exceeded the estimate for the entire year. However, approximately $11.5 million represent a receivable accrued to the prior fiscal year. Even adjusted for the receivable, collections during Fiscal Year 1999 exceed those in the prior fiscal year by 275.6 percent.
Departmental receipts exhibit growth of 8.3 percent through the end of December. Those receipts exceed the revised estimate, which anticipates a 1.0 percent annual growth in collections.
