PROVIDENCE – The state is projected to collect $580 million more in revenue over the next two years than budget officials had estimated a year ago, according to a report from WPRI-TV.
Data from the semiannual R.I. Revenue Estimating Conference projects the state will finish the current fiscal year with tax revenue $387 million higher than officials had forecast in May 2021 and $193 million higher in the coming fiscal year, according to the report.
The combined $580 million in additional projected revenue is separate from the $1 billion Rhode Island received in America Rescue Plan Act funding.
The state is expected to collect $5.1 billion in revenues this year and $5.0 billion next year.
Though pleased estimates are higher, House Finance Committee Chairman Marvin Abney and Senate Finance Committee Chairman Ryan Pearson are warning fellow lawmakers to “remain cognizant” that higher income and sales tax receipts are the result of higher wages and rising prices.
“The state’s budget is also impacted by these economic trends, as the cost to procure and provide goods and services is also increasing at rates beyond what the current budget funds,” Abney and Pearson told WPRI.
In January, Gov. Daniel J. McKee released a $12.8 billion state budget proposal for fiscal 2023 that seeks to commit an estimated $1 billion in federal pandemic aid over several years.
Income tax collections for the end of fiscal 2022 are now projected at $1.9 billion, $325 million higher than budgeted. Estimated sales tax collections are projected to be $132 million higher, at $1.5 billion.
Estimated income tax collections for the year ending June 30 rose by $325 million in new projections to $1.9 billion. This year’s estimated sales tax collections were boosted by $134 million to $1.5 billion.
For fiscal 2023, Revenue Estimating Conference raised income tax predictions $123 million higher and $44 million more in sales tax collections.
McKee said at Rhode Island Public Expenditure Council candidate forum on May 5 that he was open to reducing the state sales tax from 7% to 6.25%. Senate President Dominick J. Ruggerio has called for the elimination of the state’s car tax a year earlier.
