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State revenues starting to sag
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State revenues were negative for November, showing a 0.7 percent decline on total collections of $1.3 billion, the first negative month since December 2011. While only declining $9 million, the fact that revenues have been declining for the past year was highlighted by year-to-date total revenue growth slipping under 4 percent to 3.7 percent.

Individual income taxes grew 3.3 percent, or only $22.2 million, on total collections of $701.4 million.  Individual withholding payments were up 4.3 percent, as were estimated payments, and net refunds were down by 10.3 percent and the number of refunds was down as well.

For the month, net sales taxes for the state portion declined by 3.6 percent on collections of $435 million, a $16.1 million decline.

Motor fuel taxes increased slightly by 0.4 percent. Excise taxes were down by 0.3 percent. Motor fuel sales taxes were up slightly at 0.8 percent. This is a little tricky, but since the sales tax has been frozen at 12.1 cents per gallon and did not go up this summer with the price of fuel, only previously unidentified motor fuel payments being posted accounted for the slight increase where it would have been negative otherwise.

Corporate tax collections for the month were negative compared to last November, showing a $20 million drop.  Tobacco and alcoholic beverages, which are being adjusted compared to a year ago, were positive for the month.

November 2011 was a really good month whereas December and January were not.  With Christmas shopping appearing to rebound this year, the next two months have a good chance of showing growth.

Year-to-date revenue total slips to 3.7 percent
Since the first quarter of FY2012 a year ago, which showed a 7.2 percent increase, state revenues have continued a general slide downward with quarters of 3.4 percent, 3.4 percent, 5.3 percent in FY2012 and 4.3 percent for the first quarter of FY2013. With October and November added in, the cumulative growth rate for this fiscal year through five months is only 3.7 percent, the lowest it has been since June 2010.

Year-to-date numbers
Individual income taxes are up only 3.9 percent through November on collections of $3.6 billion and a gain of only $137.9 million. This is, of course, the state’s largest category, accounting for about 50 percent of revenue collections.

Gross sales tax collections for the year only show a 0.7 percent increase while net collections to the state are up only 1.4 percent. Within that category, sales tax areas which are negative include home furnishing at -0.9 percent, manufacturing, -2.3 percent, retail trade, -2.2 percent and utilities/energy -8.5 percent or some $41.2 million YTD.

Year-to-date motor fuel taxes are down 3.9 percent with both sales taxes and excise taxes showing declines.

Corporate tax collections are positive for the year, showing a gain of $68.6 million. Corporate refunds were down $33.7 million and corporate estimated payments were up $52.7 million or 35.5 percent. The number of refunds, though, were up YTD.

Tobacco and alcoholic beverages are up slightly YTD at 2 percent and 0.4 percent, respectively.

So, after five months of FY2013, state revenues are up by $249.4 million on a total collection of $6.9 billion. To have met the budget passed by the Legislature for 2013, revenues would need to increase by some $800 million, or 5 percent, by June 30, 2013. December and January have been make-or-break months over the past few years and are critical this year.

The Newtown tragedy
No one who saw their child, grandchild or anybody’s child this weekend could stop from thinking about the horrific slaying of the 20 children and six adults at Newtown, Conn., on Friday. Children of primary age are so precious and just as I have said about my grandchildren: pure pleasure. It is difficult to watch TV with parents and friends talking about the children and not just feel the most intense pain and sorrow. Maybe it will cause us all to redouble our efforts to make every child’s future secure, safe and successful.

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