DOR: Revenue exceeds budget fiscal YTD, and in December

PROVIDENCE – Revenue was 2 percent higher than expected through the first six months of the fiscal year and was boosted by gains in personal income tax and lottery collections, the state Department of Revenue said this week.
Revenue totaled $1.6 billion, which was higher than the $1.5 billion expected, the state agency said in a press release.
However, Acting Director of Revenue Marilyn S. McConaghy said she is concerned that the increased spread “is coming from a relatively narrow base,” citing the combination of personal income tax, business corporations tax, and estate and transfer tax adjusted revenue, which she said comprise more than 96 percent of the difference between adjusted total general revenue and expected total general revenue.

Personal income tax revenue exceeded expectations through the first six months of the fiscal year by $13.5 million, thanks to fiscal year-to-date refunds and adjustments coming in significantly below expected refunds and adjustments, the DOR said.
For the month of December alone, revenue also exceeded expectations by 2.5 percent, totaling $291.2 million instead of $284.2 million, perhaps due to stronger consumer spending for the holiday season, the DOR said. The DOR also noted the lottery transfer was $409,086 higher than expected, something it called “continued evidence” of Rhode Island’s ability to compete with nearby gaming facilities in Massachusetts.
McConaghy called the December results “solid,” noting they were driven mainly by adjusted business corporations tax revenue exceeding expected business corporations tax revenue.

“Somewhat concerning was the performance of the personal income tax,” McConaghy said, noting revenue trailed expectations in that category by $3.5 million.

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