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State revenues up

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The Department of Finance and Administration says general revenues to date are up 1.9 percent over last year and 4.8 percent above what was forecast. Individual and corporate income taxes are credited. See the jump for the release (tables excluded).
M E M O R A N D U M
TO: Richard Weiss, Director
Tim Leathers, Deputy Director
FROM: John Shelnutt, Economic Analysis & Tax Research
SUBJECT: General Revenue Report for March (FY 2008)
DATE: April 2, 2008 Copy: Governor's Office
Management Services
MARCH and YEAR-TO-DATE REVENUE SUMMARY
Year-to-date Net Available General Revenues: Year-to-date net available general
revenues total $3,190.2 million. This amount is $48.9 million or 1.6 percent above last
year and $145.4 million or 4.8 percent above the general revenue forecast. The yearto-
date amount above forecast is due primarily to gains in individual and corporate
income tax collections that were greater than anticipated. Year ago comparisons for net
available revenues continue to be influenced by non-recurring transfers of $34.0 million
from General Allotment Reserve in July 2006 and $22.0 million from Property Tax Relief
Trust Fund in December 2006.
Year-to-date Gross General Revenues: Year-to-date gross collections total $3,947.8
million, representing an increase of $130.2 million or 3.4 percent above last year. Gross
general revenues are $144.8 million or 3.8 percent above the general revenue forecast.
Substantial one-time gains in collections stemming from non-recurring business
transactions account for $65 million of the gain relative to forecast and year ago
comparisons.
Year-to-date Individual Income Taxes: Year-to-date individual income tax collections
total $1,853.7 million, $167.3 million or 9.9 percent above FY 2007 collections and
$118.4 million or 6.8 percent above forecast. Collections growth for individual monthly
withholding is up 9.9 percent over year ago levels.
Year-to-date individual income tax refunds total $291.8 million, up $39.6 million or
15.7 percent compared to last year and $14.1 million or 5.1 percent above forecast.
Year-to-date Gross Receipts Collections: Gross receipts consist primarily of sales
and use taxes. On a year-to-date basis, gross receipts total $1,595.3 million, a decrease
of $52.8 million or 3.2 percent below FY 2007 and $1.1 million or 0.1 percent above
forecast. In large part, the tax reductions implemented in July and planned in the
forecast account for the declines compared to year earlier collections.
Year-to-date Corporate Income Taxes: Year-to-date corporate revenues total $252.3
million, an increase of $1.7 million or 0.7 percent above year-to-date FY 2007.
Year-to-date corporate income tax refunds total $27.0 million, down $18.0 million or
40.0 percent from the comparable year-to-date period last year and $19.6 million or
42.0 percent below forecast.
MARCH REVENUE SUMMARY
March Net Available General Revenues total $343.1 million, $24.3 million or 7.6
percent above last year and $22.3 million or 6.9 percent above forecast.
March Gross General Revenues: March collections total $469.1 million, an increase of
$6.6 million or 1.4 percent above last year and $8.6 million or 1.9 percent above
forecast.
March Individual Income Tax collections total $203.9 million. Collections increased by
$23.8 million, or 13.2 percent, compared to last year. With respect to the forecast,
collections are $14.4 million or 7.6 percent above forecast. Growth in individual
withholding, the largest component, was up 15.0 percent compared to last year. Gains
in withholding accounted for much of the increase in collections. Payroll timing shifts
were noted during the month and relative to the year ago collection period. One extra
Friday pay day occurred in February activity and March collections relative to the year
ago calendar pattern.
March Individual Income Tax Refunds total $78.4 million. Refunds are up $7.6 million
or 10.7 percent above March 2007. This amount is 3.5 percent below forecast for the
month. Refund patterns across February and March likely reflect more rapid filing rates
on a year-to-date tax season basis. In March 2007, 161,154 refunds were processed
compared to 166,610 this year, an increase of 3.4 percent.
March Gross Receipts Collections: March collections total $178.1 million, a decrease
of $2.3 million or 1.3 percent below last year. Collections are above monthly forecast
levels by $3.0 million or 1.7 percent. The decline relative to year ago levels largely
results from sales tax reductions enacted in the last legislative session and
implemented at the start of the fiscal year.
March Corporate Income Tax collections total $49.0 million, a decrease of $12.6
million, or 20.5 percent below year earlier levels. With respect to the forecast,
collections are $6.2 million or 11.2 percent below forecast.
March Corporate Income Tax Refunds total $1.4 million. This amount is $9.1 or 86.8
percent below year ago refunds.
March Tobacco Tax collections, a smaller component of general revenue, total $11.3
million or 9.7 percent below year earlier levels. Monthly changes in tobacco tax
collections can be attributed to uneven patterns of stamp sales by wholesale
purchasers.
SPECIAL REVENUES OF NOTE
Year-to-date Medicaid Program Trust Fund: Year-to-date collections of the dedicated
soft drink tax total $34.8 million, an increase of $0.6 million or 1.8 percent above last
year.
Educational Adequacy Fund: Act 107 of the Second Extraordinary Session of 2003
increased the state sales and use tax rate from 5.125% to 6.0%, effective March 1,
2004. Effective July 1, 2004 a new sales tax on selected services went into effect in
addition to an increase in vending machine decal fees. Act 94 increased the minimum
corporate franchise tax and the tax rate, effective for calendar years beginning January
1, 2004.
The additional revenues are deposited as special revenues to the Educational
Adequacy Fund to be used to fulfill the financial obligations of the state to provide an
adequate educational system. In March 2008, $36.6 million was collected and
deposited to the fund. After deductions, the net amount is $35.5 million. Year-to-date
net collections total $319.1 million, compared to $326.0 million last year.

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