DOR: $26.1M revenue shortfall in April

PROVIDENCE – The Rhode Island Department of Revenue issued an analysis of the state’s fiscal performance in April. Rhode Island netted $342.15 million in the month, about $26.06 million less than expected, a variance of minus 7.1 percent to what the DOR predicted in November.

DOR said that April’s financial shortcomings could be attributed to shortfalls in personal income tax, business corporate tax, and declining sales and use tax revenues.

The report also expanded upon the recent updated $68.7 million fiscal-year revenue shortfall from the previous November 2016 estimate.

The to-date fiscal year declines in revenue versus the expected revenue from November 2016 are grim.

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Year to date personal income tax revenue projections decreased 1.9 percent, a difference of $20.4 million. Sales and use tax revenue declined 1.8 percent from expected numbers, a shortfall of $15.24 million.

April corporate tax revenue fell short of expectation by 35.9 percent, or $11.52 million, and is now expected to fall short of previous estimates by 10.7 percent, or $12.88 million for the fiscal year.

Of the $20.4 million expected shortfall in personal income tax for the fiscal year, $18.48 million occurred in the month of April, the largest projected decline of any single revenue stream for the state in April, a decrease of 10.3 percent from the expected revenue.

Sales and use tax revenue in April declined 3.2 percent, about $2.6 million less than expected. Sales and use tax revenues for fiscal 2017 are now expected to finish $15.24 million, 1.8 percent, less than November 2016 estimates.

The most surprising number from the April report is that revenue from financial institutions outperformed expectations for the month by 956.6 percent, with $4.09 million in revenue.

Director of Revenue Robert S. Hull noted in the report that the disparity between projected and adjusted revenue in April was substantially higher than the monthly shortfall in revenues experienced in March.

Chris Bergenheim is the PBN web editor.