ALBANY - Tax collections through December totaling $46.4 billion were $48.3 million below the state’s latest estimates and $685.3 million below initial estimates in April. Higher than anticipated personal income tax (PIT) collections in December likely reflect income paid before federal tax increases take effect in 2013 for high income taxpayers, New York State Comptroller Thomas DiNapoli said today in releasing the December cash report.
“Tax collections are still not growing at the rate needed to meet year-end projections, and the boost in personal income taxes in December likely won’t continue,” DiNapoli said. “So far the budget has been balanced by spending less and taking advantage of one-time windfalls. With the budget process about to begin again, revenue projections should be realistic so that the budget is not balanced with revenues that won’t be there.”
The Mid-Year Update to the Financial Plan released by the Division of the Budget on Nov. 28 projected tax growth of 2.9 percent for the year. However, even with higher than anticipated PIT collections in December, All Funds tax collections of $46.4 billion rose just 1.2 percent, or $545.4 million, from the same period last year. In order to meet current year-end projections, tax collections will have to grow 7.1 percent in the last three months of the fiscal year. Current projections also do not include estimates of the potential budgetary effects of Hurricane Sandy. Revised projections are expected to be included in the Executive Budget due to be released Tuesday.
The General Fund balance at the end December was $4.6 billion, $681.8 million higher than projections. However, a $2.5 billion School Tax Relief (STAR) payment was delayed from December to January. Had that payment been made as scheduled, the General Fund would have ended the month at $2.1 billion. Receipts for the year to date were $308.7 million below projections, and spending was $990.8 million below projections, primarily in local assistance grants.
Other findings from the December Cash Report include:
- General Fund receipts (including transfers from other funds), were $42.5 billion through the first nine months of the fiscal year. This was $308.7 million lower than Financial Plan projections updated in November and does not include the STAR payment normally paid in December that was moved to January. General Fund tax collections totaled $31.6 billion, an increase of $2.9 billion, or 10 percent, from last year for the same period. Collections were $69 million lower than projections. General Fund Personal Income Tax (PIT) collections through December 31 totaled $20 billion and grew 16 percent, or $2.8 billion, from last year, primarily reflecting the delayed STAR payment. If collections are adjusted to reflect this payment, growth declines to 1.6 percent or $284.4 million. While overall tax collections are below projections, year-to-date PIT collections are $77.5 million higher than current projections.
- General Fund consumption taxes are basically flat compared to last year, increasing $2 million to $6.8 billion, or $16.5 million below current projections.
- General Fund sales tax collections, the largest element of consumption taxes, grew $26 million or 0.4 percent through the first three quarters of the fiscal year, compared to the same period last year.
- General Fund business tax collections totaled $3.9 billion through the first nine months of SFY 2012-13, which was $165.5 million more than the same period one year earlier, but $88.7 million less than projections.
- All Funds tax collections of $46.4 billion increased by 1.2 percent, or $545.4 million, from last year, primarily from PIT collections (up $474.5 million or 1.7 percent) and business tax collections (up $230.2 million or 4.4 percent). Consumption taxes declined $35.9 million, or 0.3 percent, primarily due to lower cigarette and tobacco tax collections. Other taxes declined $123.4 million or 5.3 percent. All Funds Tax collections were $48.3 million less than current projections and $685.3 million below initial projections.
- General Fund spending (including transfers to other funds) of $39.6 billion increased 3.4 percent, or $1.3 billion, from the same period last year. General Fund spending was $990.8 million below projections. All Governmental Funds spending declined 5.4 percent, or $5.2 billion, compared to last year, primarily due to $5.4 billion in reduced spending for local assistance that was in part due to higher federal stimulus funding last year, as well as the delayed $2.5 billion STAR payment previously discussed and offset by higher spending for departmental operations, General State Charges and capital. All Funds spending was $809.8 million lower than current projections.
- Debt service increased $7.6 million (0.2 percent). Departmental Operations spending increased 0.4 percent, or $52.6 million, compared to the same period last year.