Yesterday (January 16) the state’s Economic and Revenue Forecast Council (ERFC) issued its monthly report on general fund revenue collections.

This report covers payments received between December 11 and January 10 for the sales tax, the use tax, the business and occupation tax, the public utility tax, the tobacco products tax, and penalties and interest (collectively the Revenue Act receipts), and it covers payments received between December 1 and December 31 for liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property and other sources.

This report primarily includes payments relating to activity in the month of November from monthly filers.

The total amount received this month was $2,311.4 million, $99.1 million (4.1%) less than the amount expected under the forecast that ERFC adopted at its November 20th meeting. Last month’s revenues exceeded the forecast by $161.3; for the two months combined, collections have exceeded forecast by $62.2 million.

For the most recent month, Revenue Act taxes (primarily the sales, use, utility, and business and occupation taxes) exceeded forecast by $27.7 million (1.5%). Retail sales tax collections were up 0.8% year over year, while B&O tax collections were up 4.1%.

For the month, Non-Revenue Act taxes fell $128.5 million short of forecast. Within this grouping, property tax collections were $117.0 million (28.5%) short of the amount forecasted. ERFC explains that this month’s “shortfall in property tax collections was due to last month’s higher-than-normal number of on-time payments for fall collections, which lowered collections this month.” Last month property tax collections exceeded the forecasted amount by $125.9 million (8.3%). For the two months combined collections were a modest $8.9 million more than forecasted (0.5%).

Payments of court fees, fines and forfeitures into the general fund totaled $1.8 million (68.4%) more than forecasted.

The chart below compares year-over-year growth rates of general fund-state revenues to year-over-year inflation in the consumer price index:

Inflation has trended downward since mid-summer 2022, which is a positive sign. For 10 of the past 12 months, however, the year-over-year growth in revenue fell short of the year-over-year growth in consumer prices. If we moved $117 million of revenue from November to December to offset the anonymous temporal pattern of property tax receipts, the November year-over-year change would decrease from 4.5% to 1.2%, while the December year-over-year change would increase from −2.1% to 2.8%. Year-over-year inflation would then exceed year-over-year revenue growth in 11 of 12 cases.

The January collections report is available here.

The ERFC will next update its revenue forecast on February 14. The updated forecast will provide the basis for the legislature’s supplemental budget.