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 November 2008. The attached table shows November 2008 month-to-date and FY2009 year-to-date tax revenue collections through November 14, 2008, along with the dollar and percentage changes from the same collection period in November 2007. Also shown are the percentage growth amounts for the full month of November 2008 and for FY2009 year-to-date through the end of November 2008 that were assumed in the benchmarks corresponding to the A&F 10/15/2008 FY2009 revenue estimate of $20.302 billion. Please note that the $20.302 billion estimate and the November month-to-date and year-to-date budgetary fund collection totals do not include increased cigarette tax collections resulting from the July 2008 increase in the cigarette tax, 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 November 14, 2008, November 2008 month-to-date tax collections totaled $482 million, up $40 million from the same period in November 2007, with the full month November benchmark (based on the $20.302 billion estimate) projecting total tax revenues of $1.297 billion, a decrease of $19 million from November 2007. Virtually all of the month-to-date increase through November 14th was the result of an increase in withholding collections, which was partially offset by a decline in corporate/business tax collections. The MTD withholding increase may be due to timing factors, though it is still too early in November to know whether this will be reversed over the remainder of the month. MTD income cash refunds totaled $44 million, up $21 million from the same period last year, with the full month benchmark calling for no change from last November. It appears that the October income tax refund decline of $13 million may have been a result of timing factors, with some October refunds shifting to November. Monthly sales tax payments are due tomorrow, November 20th.
Three additional caveats are in order when considering the attached report:
• In November, 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. Month-to-date growth comparisons for those tax types before the third week of the month are not necessarily indicative of final collections for the full month;
• November 2008 has two fewer deposit days than did November 2007, which means that collections over the remainder of November 2008 could be lower than they were in November 2007. (This year's shorter month was reflected in the November 2008 monthly benchmarks.) As a result, by the end of this month, November 2008 collections in some revenue categories will likely lose ground compared to November 2007;
• There may be other differences in the due dates for certain tax payments from one fiscal year to the next (e.g., in withholding payments or the timing of refund cycles) which complicate month-to-date comparisons to the prior year. As a result of these considerations, revenues received through November 14th as reported in the attached table may 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 November 2007 could change significantly by the end of this month. Any variances from the monthly benchmark at this point in the month should not be relied on as an indicator of what 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
November 2008 Mid-Month Tax Collections Summary (in $ millions) Collections as of November 14, 2008, Compared to Same Collection Period in November 2007