Robert R. Bliss
Revenue Commissioner Bal signals caution on future revenue growth as economy slows
Revenue Commissioner Navjeet K. Bal today announced that preliminary revenue collections for April 2008 totaled $2.737 billion, up $400 million or 17.1 percent from last April.
Total tax collections were $333 million above the April monthly benchmark based on the FY08 revenue estimate of $20.225 billion, due almost entirely to growth in income tax payments with returns and extensions, both of which reflect past economic activity rather than future economic growth.
FY08 year-to-date tax collections total $17.126 billion, up $1.219 billion or 7.7 percent ahead of the same period a year ago, and are $702 million above the FY08 year-to-date benchmark corresponding to the FY08 tax revenue estimate of $20.225 billion.
Commissioner Bal said it was necessary to exercise caution in analyzing the robust April collections which were largely fueled by investors who apparently experienced sizable income growth in tax year 2007. "As history has proven, this kind of revenue growth is extremely volatile and not likely to carry forward given current economic indicators. The decline in withholding tax and the minimal growth in sales and use tax revenues, which are current indicators of the state of the economy, are sobering" she said.
Bal also noted that faster processing of tax returns, due in part to heightened use of electronic filing, had probably netted $60 million to $70 million in income that otherwise would have been counted in May. "We could then see a corresponding decrease in our next month's report," she said.
Corporate/business tax collections of $48 million for April 2008 were down $7 million or 12.2 percent from a year ago and were $6 million below the monthly benchmark. Sales and use tax collections of $336 million in April 2008 were up $9 million or 2.7 percent from a year ago and met the monthly benchmark.
April income tax collections totaled $2.223 billion, up $401 million or 22.0 percent and $346 million above the monthly benchmark. Withholding taxes totaled $686 million, down $5 million or 0.8 percent from a year ago, $43 million below the benchmark. Income tax refunds totaled $305 million, down $16 million or 5.0 percent from a year ago, $9 million below the benchmark. Income tax payments with returns and bills totaled $1.545 billion, up $355 million or 29.8 percent from a year ago, $355 million above the benchmark.
On a fiscal 2008 year-to-date basis, sales and use tax collections are $29 million or 0.9 percent ahead of the same period a year ago, $38 million below the benchmark. Corporate/business taxes are $88 million or 4.6 percent ahead of the same period a year ago and $218 million above the benchmark mainly due to large one-time payments received in February and March. Income taxes are $1.122 billion or 12.3 percent ahead of a year ago and $540 million above the benchmark.