Note: This article has been corrected from its original to reflect the revenue shortfall as of January was misstated.
State revenues aren’t lagging projections as badly as in recent months, according to a new report that puts a positive spin in fiscal dialogue but isn’t necessarily end-all relief for budget officials.
Released Tuesday, the latest estimate from the legislature’s Fiscal Research Division puts general fund revenue through February at $158.6 million below the consensus target.
The state’s fiscal year ends June 30.
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The latest report still means collections aren’t meeting expectations, but it’s also the first improvement in that figure since last fall.
Last month’s report had showed revenues dragging by $215.8 million, though State Budget Director Lee Roberts has long urged patience into the first quarter of the calendar year. That, he said, is when the state will best know its temperature with revenues as individual income tax filings are made.
The overwhelming driver of the latest figure is lower refunds, said Roberts.
“I’m not predicting a new forecast, but this is obviously good news,” he said of the report, which comes just days after his presentation of the governor’s biennial budget proposal.
March and April – the heaviest tax filing months – will begin to crystallize the income picture.
But the latest report, while positive, is just one month of change, said Alexandra Sirota, director of the left-leaning Budget & Tax Center.
“In the end, it would be until after April 15 or even the end of the fiscal year until we know exactly how short we have come up. The bottom line is we are still far lower than where we would have been under the old tax code,” she said.
Sirota’s group has been critical of the tax code changes – including cutting income taxes and broadening the sales tax base – rolled out by the Republican-led legislature.
Roberts has noted routinely that the difference between revenues and projections this year has remained within the 2.5 percent error margin.