Some underling and troubling trends are revealed in the Fiscal Research Division’s newly released third Quarterly General Fund Revenue Report, which provides an assessment of revenue for the state. Not much has changed since the Division’s second quarterly report. Both reports foreshadow some of the particular challenges of the new tax plan—namely the fact that tax rate reductions for profitable corporations will be big revenue losers for the state.
On net, the General Fund was $12.1 million above the $14.5 billion revenue target for the first-three quarters of the current fiscal year that ends in June 2014. This marks a reduction from the $83 million point-in-time “surplus” that accrued by the end of the second quarter. The gap could shrink even further by the end of the month depending on any volatility in revenue collections post-tax season—a factor dubbed as the “April Surprise.”
Revenue collections were ahead of target by the end of the third quarter largely due to stronger-than-expected performances by the sales tax and the corporate income tax on net. Read More