While overall tax collections were higher than anticipated for the first quarter of the state’s fiscal year, which started April 1, state Comptroller Thomas DiNapoli said today that the “unexpected strength in collections was limited to April.” Personal income-tax collections were more than expected due to the settlement of prior tax year liabilities, according to DiNapoli. They were $7.6 billion through June.
The weak tax revenues in May and June, along with increasing indicators the economy is softening, “indicate a need for heightened caution through the remainder of New York State’s 2012-13 fiscal year,” the comptroller said. Combined personal income-tax receipts for May and June were $244.5 million below projections, his office’s report found.
Withholding from current wages and salaries, the largest piece of income-tax revenues, is projected to increase 5 percent—$1.5 billion—this year, but so far it is almost the same as it was in the 2011-12 fiscal year.
“Revenue collections in the first quarter were unpredictable and growth appears to have slowed,” DiNapoli said in a statement. “As has happened repeatedly in recent years, unexpected changes in the economy are creating a drag on forecasted revenues. The state must remain vigilant about managing our budget given the challenge of an uncertain economy.”
Other findings in the report include:
—General fund tax collections were $11.4 billion, $83.1 million higher than projected for the current budget year but $347.7 million lower than the same period last year.
—Consumption taxes totaled $2.2 billion for the first quarter, $77.2 million lower than anticipated. Collections would have to increase 3.4 percent in the remaining nine months in the fiscal year to meet year-end projections.
—Business-tax collections for April through June were $71 million less than the same period in 2011, a 5.2 percent drop. However, they were $78.6 million greater than had been estimated in the budget.