Tax collections see big increase in May

DES MOINES - May was a record-breaking month for state tax collections.

Legislative Services Agency officials confirmed Wednesday that the $1.03 billion in gross state tax receipts in May was the most tax money ever collected in one month and marked only the second time that Iowa eclipsed the billion-dollar mark for monthly state receipts. Net revenue to the state last month was about $934 million after refunds and other adjustments were taken into account, according to the LSA monthly report.

The previous high was almost $1.023 billion in gross state taxes received in May 2013, followed by the $970 million in gross receipts collected last May.

'It was a good month,” said Jeff Robinson, an LSA senior tax analyst who noted last month's tax receipts were impacted by calendar issues that pushed the normal April 30 filing deadline to May 2 and also were aided by hold-over deposits from payments with tax returns and a tax-coupling issue in the Legislature that pushed back the deadline for farm tax filings and slowed the filing of some business tax returns.

'That would have contributed to crowding money into May,” he said.

Despite May's record that increased net receipts by $59 million over a year ago, year-to-date state tax collections were still running about $44.4 million below the projected yearly growth of 2.2 percent with one month remaining in the 2016 fiscal year. The $6.151 billion in net state tax receipts after refunds was 1.5 percent higher than the same period a year ago but would need to finish at $6.842 billion on June 30 to hit the yearly growth target.

'It's a relief that a bad April did not turn into a bad May, but we're still below the estimate in the end,” Robinson said. 'It's not awful, and it's not going downhill, but it's still below expectations.”

May receipts rebounded to a 6.7 percent increase over the previous year, mostly because of strong personal income tax collections.

David Roederer, Gov. Terry Branstad's budget director, expressed concern last month when Iowa's April tax receipts took a deep-than-expected drop. He worries that collections for fiscal 2016 could come in $50 million below growth projections that already had been revised downward by $46 million in March.

However, Roederer, the director of the Iowa Department of Management and leader of the three-member state Revenue Estimating Conference, said Wednesday, 'I'm a little more optimistic” after looking at the May numbers although he said state fiscal analysts will 'be watching June very carefully.”

Iowa personal income tax collections continued to be the big driver with a 12.8 percent increase in May that brought receipts to nearly $4.028 billion through 11 months of the current fiscal year.

Sales/use tax and corporate income tax receipts both declined in May but sales/use collections were up 1.2 percent for the year while corporate income tax collections were off 9.9 percent from a year ago.