Yesterday (May 14) the state’s Economic and Revenue Forecast Council (ERFC) issued its monthly report on general fund revenue collections.

This report covers payments received between April 11 and May 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 April 1 and April 30 for liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property and other sources.
This report primarily includes payments relating to March activity for monthly filers and January–March activity for quarterly filers.

The total amount received this month was $2,384.0 million, $114.0 million (4.6%) less than the amount expected under the forecast that ERFC adopted at its February 14th meeting. For the three months since that forecast, combined collections are $60.6 million less than the amount forecasted.

For the most recent month, Revenue Act taxes (primarily the sales, use, utility, and business and occupation taxes) fell $113.4 million (4.5%) short of forecast. Retail sales tax collections were down 0.2% year over year, while B&O tax collections were down 4.2%. The fact that there were two fewer weekdays in March 2024 than in March 2023 contributed to the B&O reduction.

For the month, Non-Revenue Act taxes fell $7.7 million short of forecast. Within this grouping, property tax collections were $42.7 million (16.6%) short of the amount forecasted. ERFC says that this “shortfall is likely due to a lower-than-usual percentage of spring payments being deposited in April instead of May rather than a decrease in expected collections. The shortfall is therefore likely to reverse next month when the bulk of the spring payments, which were due April 30th, will be deposited.” The property tax shortfall was largely offset by transfers of unclaimed property to the general fund, which were $37.5 million greater than had been 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:

Year-over-year inflation is significantly lower than the 9.1% seen in June 2022, which is a positive sign. Inflation remains well above the Federal Reserve’s target, however. For 10 of the past 13 months, the year-over-year growth in revenue fell short of the year-over-year growth in consumer prices. The large year-over-year revenue jump in March is due to this February’s extra leap year day.

The ERFC report is available here.