Worries in state government about lagging revenue have been relieved for the most part, though budget watchers maintain a wary eye on the future.
Commissioner of Administration Larry Schepker worried about a sharp decrease in sales tax revenue in April and had hoped that a big part of that drop resulted from giving residents in 35 flooded counties another month to file their income taxes. That proved to be the case. Residents filed their income tax returns. Collections from individual income taxes jumped by 30% in May and now are up nearly 7% for the fiscal year. Personal income tax collections have now surpassed $5.2 billion.
Sales and use tax collections for May dropped more than 15 % in May and now are off nearly 3% for the year. Sales tax collections rank number two in state revenue. They are approaching $2 billion at $1.83 billion, but that still is off from the $1.88 billion sales and use taxes raised at this time last year.
Schepker says discretionary income seems to be shrinking. He suspects a lot of money is pouring into our gas tanks and not into the retail buying that the state relies upon to prop up sales tax revenue. Also, with budgets tightening, consumers are sticking with buying essentials, such as groceries and prescription drugs. The state charges no sales tax on groceries in prescription drugs.
Corporate income and corporate franchise tax collections dropped substantially in April, down nearly 17%, and lag about a percent behind for the year. The fiscal year ends June 30th.