March 15, 2022
The monthly report on general fund revenue collections from the state’s Economic and Revenue Forecast Council (ERFC) was issued yesterday.
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 February 11 and March 10, which generally relate to transactions that occurred in the month of January, well before Russia’s invasion of Ukraine.
For liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property and other sources, the report covers payments received between February 1 and February 28. Again, these payments relate to transactions made prior to the Russian invasion.
The total amount received was $1,813.3 million, $72.3 million (4.2%) more than the amount expected under the forecast that ERFC adopted on February 16th.
Revenue Act taxes (primarily the sales, use, utility, and business and occupation taxes) exceeded forecast by $58.8 million (3.9%), while non-Revenue Act taxes exceeded forecast by $13.9 million (6.0%). Within the latter grouping, real estate excise tax (REET) exceeded forecast by $24.8 million (26.1%). Regarding REET, ERFC staff note:
Seasonally adjusted taxable activity decreased slightly from last month’s level… Sales of large commercial property (property valued at $10 million or more) increased to $1.71 billion from last month’s [upwardly] revised total of $1.52 billion while seasonally adjusted activity excluding large sales decreased.
Here is a chart showing the value of transactions subject to REET since 2002:
The collections report is available here.
As I noted above, the economic activity driving this collections report predates the Russian invasion of Ukraine. Economists polled by the Initiative on Global Markets at the University of Chicago Booth School of Business expect the war to reduce global growth and raise global inflation over the next year (link here). It will take a month or two for these effects to show up in state collections.Categories: Budget , Economy.