Projections for Fiscal Year 2019, which begins July 1, shows a reduction in revenues from the Sales and Use Tax, the Corporation Business Tax (CBT), and most of the other revenues from what was projected in March. She described Gross Income Tax (GIT) revenues as propping up Fiscal Year 2018 total revenues, but pointed out that those funds are dedicated to the state’s Property Tax Relief Fund and will do little to help balance the budget.
“Despite our best wishes, there is no April surprise. Instead, we have a May reality check – a reality check on the urgent need for new revenues,” Muoio told the Assembly Budget Committee on May 21. “We must take action to correct our serious structural deficit and structural fund imbalance. General Fund revenues are simply not keeping pace with our obligations.”
Muoio blamed the structural deficit caused by the sales tax reduction from last year and dedicating State Lottery funds to support public employee pensions.
“The good news is that overall revenues remain close to the targets we projected for FY18 and FY19,” she said. “The more troubling news is that our structural budget difficulties are accelerating.”
Here are some of the details from Muoio’s testimony:
- For the remainder of FY18, the treasurer said the income tax revenues would remain at historically above-average growth and bring in a projected $15.153 billion.
- Sales tax growth is up only 1.6 percent through the end of April and is projected to end the year at $9.545 billion, a 1 percent increase over FY 17.
- CBT collections are down 1.9 percent through the end of April and prospects for the end of the year are not good. Estimates for CBT revenue have been reduced to $2.069 billion for FY 18.
- Looking ahead, income taxes are expected to grow a healthy 8.6 percent in the next fiscal year, but projections for both the sales tax and the CBT have been cut for FY 2019.