State tax collections up 7.7 percent in April

DES MOINES – State fiscal officials are breathing a little easier that current revenue projections will hold through June 30 thanks to a second straight month of positive growth in state tax receipts.

According to the Legislative Services Agency monthly revenue report issued Monday, net state tax collections were up 7.7 percent in April and year-to-date receipts through 10 months of the current fiscal year were off 4.6 percent from the same period in fiscal 2009. That compared to the revised Revenue Estimating Conference's fiscal 2010 estimate that net tax receipts would be down 8.7 percent by June 30.

“It's not certain, but it's a good bet” that current year tax collections will be better than the projected 8.7 percent yearly decline, said Jeff Robinson, an LSA fiscal analyst.

The biggest unknown heading into May, which is the single largest month for state receipts coming on the heels of the April 30 deadline for filing state income tax returns, is how will tax payments come in and what will be the volume of post-recession refund checks that currently stand a $726.6 million through April but are projected to go as high as $901 million by fiscal year's end June 30, Robinson said.

Also, this month's net receipts will compare to a May 2009 total that plunged 12.4 percent below the previous year's monthly figure, he noted.

“Even if the rest of the returns pull down our receipts, they're not going to pull them down as far as that 8.7 percent,” Robinson said. “It will change things but not enough to make things as poorly as projected.”

Robinson said it was encouraging that state corporate income tax receipts posted the second straight positive month in April and, while still down 3.6 percent for the year, were running better than the negative 12.8 percent projection for the full year. Personal income tax receipts were down slightly again last month, but withholdings were up, Robinson said, and the overall year-to-date change of negative 3 percent also was better than the yearly projection.

Sales and use tax receipts were up slightly in April and averaging better than the year-long estimate and farm income returns, while not as good as 2009, also were better than expected, he said.

For the first 10 months of the current fiscal year, the state treasury has taken in more than $5.387 billion in gross tax receipts – compared with over $5.568 billion for the same period in fiscal 2009. That figures drops by more than $1.03 billion when refunds of $726.6 million for individual and corporate taxpayers are subtracted and another $306 million is school infrastructure sales tax receipts are returned to local jurisdictions.

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