The monthly report on general fund revenue collections from the state’s Economic and Revenue Forecast Council (ERFC) was issued this morning.

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), this report covers payments received between January 11 and February 10, which generally relate to transactions that occurred in the month of December.

For liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property and other sources, the report covers payments received between January 1 and January 31.

The total amount received was $2,276.5 million, $102.4 million (4.7%) more than the amount expected under the forecast that ERFC adopted on November 19th. However, ERFC staff explain:

During the collection period there was a large early payment of deferred taxes that was not expected until next year, along with a large one-time payment for past-due taxes. The payments totaled $68.8 million. Without these payments, this month’s collections would have been [just] $33.6 million (1.5%) higher than forecasted.

Revenue Act taxes (primarily the sales, use, utility, and business and occupations taxes) exceeded forecast by $84.4 million (4.3%), while non-Revenue Act taxes exceeded forecast by $18.5 million (8.7%). Within the latter grouping, real estate excise tax (REET) exceeded forecast by $27.0 million (28.7%). Regarding REET, ERFC staff note:

Seasonally adjusted taxable activity decreased from last month’s level… Sales of large commercial property (property valued at $10 million or more) decreased to $1.47 billion from last month’s total of $2.87 billion and seasonally adjusted activity excluding large sales also decreased.

The collections report is available here.

At its quarterly meeting tomorrow morning ERFC will adopt an update to the revenue forecast. For the three months since the November ERFC meeting, collections have exceeded forecast by a total of $452.3 million. Based on this, I would normally expect to see an increase of $0.7 to $1.4 billion to the forecast for the current and following bienniums combined. However, the level of economic risk is much higher now than it was in November, due to the spike in inflation and the prospect of war in Ukraine. Forecasters (and budget writers) should be cautious in light of these risks.