Honorable Chairmen and Ranking Minority Members of the Ways and Means Committees:
Pursuant to chapter 196 of the Acts of 2008, the Department of Revenue hereby submits its midmonth revenue tax collection report for the month of October 2008. The attached table shows October 2008 month-to-date and FY2009 year-to-date tax revenue collections through October 15, 2008, along with the dollar and percentage changes from the same collection period in October 2007. Also shown are the percentage growth amounts for the full month of October 2008 and for FY2009 year-to-date through the end of October 2008 that were assumed in the benchmarks corresponding to the original FY2009 revenue estimate of $21.402 billion. (Benchmarks for the October 15, 2008 estimate of $20.302 billion released last week have not yet been developed.) Please note that the $21.402 billion estimate and the October month-to-date and year-to-date budgetary fund collection totals do not include increased cigarette tax collections resulting from the increase in the cigarette tax collections, which are dedicated to the Commonwealth Care Trust Fund, a non-budgetary fund. However, the increase in cigarette tax collections resulting from the higher cigarette tax is shown in a separate line at the bottom of the table.
Through October 15, 2008, October 2008 month-to-date tax collections totaled $441 million, up $30 million from the same period in October 2007, with the full month October benchmark (based on the original $21.402 billion estimate) projecting total tax revenues of $1.268 billion, an increase of $66 million from October 2007. Virtually all of the month-to-date increase through October 15th was the result of a decrease in corporate/business tax refunds, due to the fact that those refunds will be issued later in October this year than last. By the end of October, corporate/business tax refunds will significantly exceed last years' total as well as exceed the amount assumed in the original benchmarks, a factor that was taken into account in the October 15, 2008 downward revenue estimate revision.
Two additional caveats are in order when considering the attached report:
• In October, most of the important activity occurs during the second half of the month, primarily because sales, meals, motor fuels, and rooms tax returns are due on the 20th of each month and most corporate/business refunds and income tax refunds are processed in the last two weeks of October;
• There may be other differences in the due dates for certain tax payments from one fiscal year to the next (e.g., in the timing of refund cycles) which complicate month-to-date comparisons to the prior year.
As a result of these considerations, revenues received through the October 15th as reported in the attached table will most likely not be indicative of what the final results for the full month will be. Specifically, they do not represent one-half of the revenues to be received in the full month and the month-to-date growth rates compared to October 2007 will change significantly by the end of this month. Any variances from the monthly benchmark at this point should not be relied on as an indicator of what the total final revenues for the month will be, compared to the monthly benchmarks.
If you have any questions concerning this report, please contact me (at 626-2201), or Howard Merkowitz, Director of the Office of Tax Policy Analysis (at 626-2100).
Navjeet K. Bal
cc: Leslie A. Kirwan, Secretary of Administration and Finance
Representative Salvatore F. DiMasi, House Speaker
Senator Therese Murray, Senate President
Representative John J. Binienda, House Chair, Joint Committee on Revenue
Senator Cynthia Stone Creem, Senate Chair, Joint Committee on Revenue
Representative Bradley H. Jones, Jr., House Minority Leader
Senator Richard R. Tisei, Senate Minority Leader
October 2008 Mid-Month Tax Collections Summary (in $ millions) Collections as of October 15, 2008, Compared to Same Collection Period in October 2007