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

This report covers payments received between February 11 and March 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 March 1 and March 31 for liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property and other sources.

This report includes payments primarily from monthly filers.

The total amount received this month was $1,896.6 million, $110.0 million (6.2%) more than the amount expected under the forecast that ERFC adopted on November 18th.

For the month, Revenue Act taxes (primarily the sales, use, utility, and business and occupation taxes) exceeded forecast by $96.3 million (6.0%). These taxes generally reflect economic activity in the month of January. Here is a chart showing seasonally adjusted Revenue Act receipts since 2004:

For the month, Non-Revenue Act taxes exceeded forecast by $13.6 million.

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

For 9 of the last 10 months, year-over-year CPI inflation exceeded the year-over-year increase in GFS revenues. While inflation has trended downward since mid-summer, the gap between inflation and revenue growth for this month was considerably smaller than those for the preceding three months.

The March collections report is available here.

At its quarterly meeting next Monday (Zoom link here), the Economic and Revenue Forecast Council will update its forecasts of state revenues. Legislators will base the budget for the 2023–2025 biennium on these updated forecasts. Over the four months since the forecasts were last updated, collections have exceeded forecast by $198.6 million in total. Based on this “positive variance,” I would normally expect to see upward adjustments both to the forecast for the remainder of 2021–23 and to the forecast for 2023–25. However, the failure of Silicon Valley Bank has greatly increased economic uncertainty, and this may lead forecasters to be more cautious, particularly with respect to 2023–25.