Budget Watch - General Revenue $1.455 Billion Below Estimate
General Revenue (GR) collections for the month of May came in $779.6 million (26.4 percent) below estimate. This news comes from the new Monthly Revenue Report, just released by the Office of Economic and Demographic Research. It is somewhat surprising that the amount by which May GR collections fell short of the previous estimates is less than that of April ($878.1 million). May collections largely reflect sales activity in April, a month that was almost entirely under the statewide ‘Safer at Home’ order.
The loss in May sales tax collections ($695.4 million or 32 percent) is nearly $100 million more than in April, but losses in non-sales tax GR sources were smaller than they were last month. This was expected because $323.1 million of the amount of the April underestimate was due to state orders delaying required payments for three GR sources: corporate income taxes, corporate filing fees, and highway safety taxes and fees. Some of that amount was recovered in May. In addition, changes in taxpayers’ estimated payments of sales taxes in May had the effect of spreading sales tax losses over several months.
The last two months of GR collections are a combined $1.658 billion under estimate; however, prior to the pandemic, collections were running a bit above estimate.