Tax collections and spending below projections through mid-year
FROM COMPTROLLER DiNAPOLI’S OFFICE
State spending was nearly $860 million lower than expected through the first half of the fiscal year while tax collections were just shy of projections, according to the Mid-Year Update and September cash report released this week by New York State Comptroller Thomas P. DiNapoli. Still, threats of another federal government shutdown and battle over the federal debt ceiling, as well as the continued slow pace of economic growth, could make it harder for the state to remain in line with its financial plan.
“New York is in a stable financial position half way through the fiscal year,” DiNapoli said. “Sales tax collections are on track to exceed year-end projections and fund balances are above planned levels. Business tax collections are below projections so far this year and should be watched closely. The federal government is up and running again, but the possibility of further disruptions from Washington and continued slow economic growth remind us that caution is still necessary.”
Spending from All Funds through the first six months was $64.1 billion, an increase of 6.9 percent or $4.1 billion from a year ago, but was $859.4 million below projections from the first quarter update to the enacted budget financial plan. Spending on local assistance grants grew by $2.7 billion, state operations spending rose $642 million and general state charges increased $682.4 million. Spending for debt service declined $234 million compared to last year, primarily due to timing.
All Funds tax collections rose by $2.8 billion, or 8.8 percent, to $34.4 billion through the first half of SFY 2013-14, thanks to 11.4 percent growth in personal income tax (PIT) collections. Withholding collections, taxes that are paid directly from paychecks and the state’s second largest revenue source after federal receipts, increased 3.5 percent through September, on track with year-end projections.
Miscellaneous receipts totaled $11.8 billion through September, $72 million higher than collections during the same period last year. This includes a $250 million settlement from Bank of Tokyo Mitsubishi UFJ and $10 million from Deloitte Financial Advisory Services, as well as $341 million in back payments related to casinos operated by the St. Regis Mohawk Tribe and the Seneca Nation of Indians. Federal receipts increased 13.4 percent, primarily due to disaster assistance spending.
The General Fund closing balance of $6.3 billion at the end of the first half of the fiscal year was $709.5 million higher than updated projections released August 2. This reflects $125.3 million in lower than anticipated receipts and $834.8 million in lower than anticipated spending. The Financial Plan is expected to be updated soon to reflect results through September.
Other findings from the Mid-Year Report include:
· Tax revenues are slightly below projections. All Funds Tax collections through Sept. 30 were $34.4 billion, or $54.9 million lower than projected in the First Quarter Update to the Enacted Budget Financial Plan, primarily because of lower than anticipated business tax collections.
· Personal Income Tax (PIT) collections exceed projections. PIT collections were $21.6 billion through the month of September, an increase of 11.4 percent, or $2.2 billion, from last year for the same period. This is $37.4 million more than projected, although most of this growth was from tax payments made in April. Withholding collections increased $483.1 million in the April-September period, or 3.5 percent, from the first half of last year.
· Consumption taxes show growth and are above projections. Consumption taxes totaled $7.7 billion, an increase of 4.8 percent, or $350.3 million, from the same period last year. Collections through the first half of the fiscal year were $44.8 million above updated projections through Sept. 30. Sales tax collections increased $394.8 million, or 6.6 percent, from the first half of last year.
· Business taxes up, but below plan. Business tax collections increased 3.7 percent, or $127.3 million, over the first six months compared to last year for the same period, but were $186.5 million below estimates for the same period.