State tax collections improve in March

DES MOINES – Net state revenues' strong rebound last month was encouraging, but still may not give a true picture with three months left in the fiscal year, a legislative tax analyst said Thursday.

State tax collections surged by 16.8 percent in March, but Jeff Robinson of the non-partisan Legislative Services Agency said about $30 million of the $54 million gain was due to a processing issue with February ending on a weekend. When the calendar issue was removed, the actual growth last month still was about 7.5 percent, he said.

“It's still a positive month, which is nice to see,” Robinson said. “It looks better than it did at the end of last month.”

The March uptick meant year-to-date net receipts are running about 5.6 percent below the previous nine-month period, he said. The good news is that's about 3 percent better than the state Revenue Estimating Conference projected with one quarter remaining in fiscal 2010.

Robinson cautioned that the numbers may be slightly skewed because tax refunds, especially corporate tax refunds, were lower that expected last month, which may reflect the fact that the Department of Revenue is under staffed and likely behind in processing returns. He said he still expects refunds to surge in April and May during the peak federal and state tax filing seasons but he noted the REC estimate accounted for strong refund numbers.

Growth in sales/use, personal income and corporate income tax receipts in March also were encouraging since the year-to-date declines have slowed. However, he said probably the best that could be expected would be that the negative numbers could climb closer to flat by June 30, when the current fiscal year ends and there is a brief “hold-over” period before the fiscal 2010 books will be officially closed.

Comments: (515) 243-7220;

rod.boshart@gazcomm.com