State Sales Tax Revenues Miss Forecast by More Than $40 Million in January
One hundred dollar notes are seen in this photo illustration at a bank in Seoul January 9, 2013. Japan's drive to weaken the yen poses a threat to big South Korean exporters such as Hyundai Motor, but Koreans may benefit as the new president aims to shift policy away from supporting big exporting conglomerates. The yen's tumbling by some 10 percent to the dollar in the December quarter at a time when the won has been on the rise sent the shares of big exporters falling and raised concerns among the policymakers in Seoul. Picture taken January 9, 2013. To match Analysis KOREA-CURRENCY/ REUTERS/Lee Jae-Won (SOUTH KOREA - Tags: BUSINESS) - RTR3CGGO
North Dakota keeps revising its revenue forecasts down, and actual revenue collections keep coming in even lower.
It’s a reality that’s complicating the Legislature’s efforts to budget for the next biennium. While revenue collections are still coming in ahead of pre-oil boom levels, biennium to date, nobody seems certain about where the floor is for post-oil boom tax collections.
This chart shows cumulative general fund revenues for the current biennium compared to the previous four:
The latest report from the Office of Management and Budget (see below) shows sales tax collections for January coming in $40.6 million under the state’s November 2016 forecast. The total general fund revenues for the month nearly $21 million, with the sales tax shortfall being made up by better than expected revenues from other taxes, notably the personal and corporate income taxes.
Still, biennium to date, general fund revenues are down $35.7 million from the November forecast, more than $56 million from the July 2016 forecast, and more than $1.329 billion from last biennium’s actual collections.
But, again, compared to the same point in the last pre-oil boom biennium general fund revenues are up by more than $957 million.
This is the pickle lawmakers, and Governor Doug Burgum, are in. Boom-era revenues are diminished, if not gone entirely, but not all of the boom-era expenses have disappeared. Meanwhile, there is little certainty as to when the bleeding will stop.
Lawmakers are due to get yet another revenue forecast in March, but after a serious of inaccurate forecasts over the last biennium, how much confidence are they going to have in it?
Here’s the full OMB report:
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