How Much Revenue Growth is Needed to Hit the Administration’s Latest Revenue Projections for This Year?
Even with the administration making its second reduction in the current-year revenue projections, its estimates may still be too high. The Office of Legislative Services (OLS) is now projecting $259 million less revenue than the administration with just two months to go in the fiscal year. The two entities’ estimates on current-year revenues are generally closer by now; last year at this time the difference was just $154 million. (When the final audit was released, revenue was actually $317 million and $163 million less than the projections of the administration and OLS, respectively.)
To gauge the viability of the two estimates, we can look at the growth rates each projection would require in the last two months when compared to the current year-to-date growth rate.
The biggest disagreement between the administration and OLS is the $107 million difference on the Corporate Business Tax (CBT). Calculating the CBT’s growth rate for the remainder of the year is more complicated than other taxes because some CBT payments are allotted to the income tax after the fiscal year ends. Historically, that shift is in the $100 million to $150 million range.
Five other taxes with at least a $10 million difference between projections account for another $89 million of the total $259 million difference.