Secretary of Administration Jeb Spaulding released the July 2013 General Fund (GF) revenue results. General Fund revenues totaled $103.46 million for July 2013, -$0.32 million or -0.31% below the monthly target, but +$11.11 million or +$12.03% above the prior year (FY 2013). July is the first month of fiscal year (FY) 2014. The vital personal income tax was more than one percent below expectations.
Secretary Spaulding said, ‘It is nice to be basically on target for the month and significantly ahead of last year, but I caution against reading too much into collections from the first month of a new fiscal year. July is not generally a good indicator of the fiscal year’s revenue trend and this month there were a few occurrences, such as a large estate tax settlement and technical adjustments in the corporate sector, which color the overall results.’
Current targets reflect the Fiscal Year 2013 Consensus Revenue Forecast adopted by the Emergency Board at their July 23, 2013 meeting. Statutorily, the State is required to revise the Consensus Revenue Forecast two times per year, in January and July; the Emergency Board may schedule interim revisions if deemed necessary. A date for the January 2013 Emergency Board has not been selected at this time.
Personal Income Tax (PI) receipts are the largest single state revenue source providing approximately 52% of total GF revenue. PI Tax receipts are reported Net-of-Personal Income Tax refunds. Net Personal Income Tax is comprised of PI Withholding Tax, PI Estimated Payments, PI Refunds Paid, and PI Other. Net PI Receipts for July were recorded at $50.32 million, -$0.59 million or -1.16% short of the monthly target of $50.91 million.
Corporate Income Taxes are also reported net of refunds. Net Corporate Income Taxes were $0.20 million for the month, -$1.66 million or -89.05% short of the monthly target of $1.86 million. Secretary Spaulding commented, ‘The underperformance in Corporate was due to a large transfer necessary to reconcile out of state tax payer payments, which are initially received as co-mingled payments in Corporate, for partnership, Sub-S, and personal taxes.’
Consumption tax results for July were mixed: Sales & Use Tax receipts of $21.10 million were short of target by -$0.48 million (-2.23%); and Rooms & Meals Tax receipts of $12.04 million were above target by +$0.71 million (+6.23%). Compared to the results for the same month of the prior fiscal year (FY 2013), July Sales & Use Tax exceeded prior year by +0.54%, and Meals & Rooms exceeded the prior year results by +7.56%.
The remaining non-major tax components include Insurance, Inheritance & Estate Tax, Real Property Transfer Tax, and ‘Other’(which includes: Bank Franchise Tax, Telephone Tax, Liquor Tax, Beverage Tax, Fees, and Other Taxes). The results for the remaining non-major categories for July were as follows: Insurance Tax, $0.44 million (+51.45%); Inheritance & Estate Tax, $8.91 million (+0.74%); Property Transfer Tax, $1.02 million (-4.24%); and ‘Other’, $9.43 million (+19.42%). July 2013 non-major components total of $19.80 million, is +$10.20 million or +106.20% ahead of receipts for the same period of the prior fiscal year. This increase over prior year was primarily due to an estate settlement received this month and timing on the receipt of an energy generating payment.
Transportation Fund
Spaulding also released the non-dedicated Transportation Fund Revenue for July. Total non-dedicated Transportation Fund receipts of $18.30 million for the month exceeded target by +$0.38 million (+2.12%), against the monthly target of $17.93 million. July 2013 non-dedicated Transportation Funds also exceeded the prior year (FY 2013) by 14.88% for the same period.
Results for the five non-dedicated Transportation Fund revenue components for July were mixed. Individual Transportation Fund revenue components for July were: Gasoline Tax, $6.36 million or -3.66% behind target; Diesel Tax, $0.97 million or +347.52% ahead of target; Motor Vehicle Purchase & Use Tax, $3.69 million or -7.11% behind target; Motor Vehicle Fees, $5.97 million or +3.27% above; and Other Fees, $1.32 million or -2.49% short of the monthly target.
The Secretary also reported on the results for the Transportation Infrastructure Bond Fund (’TIB’). TIB Fund Gas receipts for July were $1.74 million or -2.01% below target. TIB Fund Diesel receipts for the month were $0.10 million or +302.80% above the monthly target. Net total TIB receipts for July of $1.84 million were essentially the same as the prior fiscal year (FY 2013). TIB Fund receipts are noted below the following table:
Education Fund
Spaulding also released the ‘non-Property Tax’Education Fund revenues (which constitute approximately 13% of the total Education Fund sources). The non-Property Tax Education Fund receipts for July totaled $14.21 million, or -$0.40 million (-2.74%) below the $14.61 million target for the month. The individual Education Fund revenue component results for July were: Sales & Use Tax, $11.36 million, or -2.23% below target; Motor Vehicle Purchase & Use Tax, $1.85 million or -7.10%; Lottery Transfer of $1.00 million was exactly on target; and Education Fund Interest was $0.00 for both receipts and target. The July 2013 non-property tax Education Fund receipts are 7.44% ahead of the July 2012 results for the same period.
Conclusion
Spaulding said, ‘July is historically a volatile and small revenue producing month. We should not use July as a reliable indicator of the remainder of the year. That being said, the year over year growth shows continued steady upward revenue progress, which is encouraging.’