Fiscal year 2016 ends with revenue bump in June, but still lags behind REC projections

General fund revenue grew by $15.3 million or 2.5 percent in June, as compared to June 2015.

This growth puts FY 2016 general fund growth at 1.6 percent, once adjusted for legislative actions. That figure is slightly below the 2.2 percent adjusted forecast from the Revenue Estimating Conference’s March meeting. According to LSA, this equates to actual revenue falling $42.4 million short of the REC projection.

In the revenue categories, personal income tax collections were up just $4.2 million (1.3 percent) over the June 2015 figures. For the fiscal year, personal income tax revenue grew by 3.5 percent or $148.2 million. This was below the 5.6 percent growth (+$234.9 million) the REC had projected when it revised its numbers in March.

Within the three subcategories, withholding payments grew 4.4 percent (+$142.3 million) during FY 2016 and estimate payments grew by 5.3 percent (+$25.7 million). Payments filed with income tax returns took a hit during FY 2016, falling by 4.3 percent (-$19.8 million).

Sales and use tax had been a concern since the start of FY 2016. The fiscal year ended on a major upswing in this category, as collections were 14.7 percent higher than what was taken in during June 2015.

The $27.5 million increase in June helped move the overall FY 2016 figure to growth of 2.1 percent. This figure is above the revised REC estimate, which may be a good sign going into FY 2017. But the 2.1 percent growth is half of FY 2015’s sales and use tax growth of 4.2 percent.

Corporate income tax collections fell in June by 8.5 percent or $9.4 million when compared to June 2015. The drop was not unexpected, as corporate income tax last year finished FY 2015 very strong.

For the year, corporate collections were down 9.7 percent or $55.8 million. The decrease in revenue was actually less than what the REC had projected in March, when they expected corporate income tax to fall by 12.6 percent in FY 2016.

Other revenue categories were positive for the fiscal year. FY 2016 collections were higher in insurance premium tax (+9.2 percent), inheritance tax (+5.5 percent), franchise tax (+10.9 percent), state liquor profits (+3.6 percent), interest earned (+10.8 percent), and miscellaneous receipts (+7.6 percent).

Judicial revenue, which was expected to grow by $12 million in FY 2016, actually declined $2.2 million when compared to FY 2015.

Tax refunds were also higher for June. For the month, the state paid out $45.3 million in refunds. This was $6.9 million more than what the state paid in June 2015. For fiscal year 2016, refunds were up 5.8 percent over FY 2015, but that figure is lower than the REC projection of 6.5 percent growth in refunds.

While the calendar has come to a close on FY 2016, the books do not officially close until Aug. 30.

At that point, the state will have final figures for accrued revenue, transfers from the lottery and other areas of revenue for the year. Once that data is calculated, the final picture on FY 2016 will be developed.

I hope you have a wonderful rest of your summer.