Tax collections from April 2012 through last month totaled $55.9 billion, 3.3 percent higher than the same period last year, likely a result of federal tax actions that led many employers to move salary and bonus payments for high-income earners to the end of December, according to state Comptroller Thomas DiNapoli. Many wealthy taxpayers sold assets in December to avoid federal tax hikes, he said.
Collections are $538.2 million more than was anticipated in the Executive Budget’s updated budget projections last month, the comptroller said in releasing his office’s January cash report.
“The good news is that for the second month in a row Personal Income Tax collections were higher than anticipated,” he said in a statement. “The state received a boost in receipts because high-income taxpayers shifted income into 2012 in response to changes in federal tax law occurring in 2013. With continuing challenges, including cuts in federal Medicaid reimbursement, we should use caution in forecasting revenue for next year’s budget.”
DiNapoli is scheduled to announce his office’s estimate of Wall Street bonuses and their impact on the New York city and state economies tomorrow morning. The state budget relies heavily on taxes from the annual bonuses for its budget.
Through January, the state’s personal income-tax collections were up 4.7 percent — $1.6 billion — compared to the same period a year earlier. Withholding collections increased $160.4 million in December and $658 million in January over last year’s figures. The growth in those two months represents 86 percent of the growth so far this fiscal year, the report said.
The state’s general fund had a closing balance of $7.1 billion Jan. 31, $1 billion higher than the latest projections. Anticipated receipts were $411.1 million higher than anticipated and spending was $621.3 million lower than expected.
The spending variance is not expected to continue through the end of the fiscal year, March 31. The latest general fund spending projections from the governor’s Division of the Budget anticipate the state will spending $286 million more than initially expected in the state budget. That means significantly higher spending is anticipated this month and in March, DiNapoli said.