Projo Biz Blog

By Paul Edward Parker
Journal Staff Writer

An early glimpse at how much money the state is taking in for the budget year that started in July doesn't offer good news.

Two reports issued Tuesday afternoon by the state Revenue Analysis Office showed total state revenue in July and August of 2009 was down 4.2 percent from the same two months last year, after adjusting for money collected in one year that is accounted for in the previous year.

Besides trailing last year, the revenues for July and August also trailed what state budgeters projected would come in. The shortfall there is $12.8 million or 3.3 percent.

Paul L. Dion, the chief of the Revenue Analysis Office, cautioned that, because July and August represent such a small slice of the yearly revenue pie, coming months will offer a better forecast of where the state is headed.

Typically, July and August together account for 12.7 percent of yearly revenues. If the $12.8 million shortfall were projected out on that basis, the budget deficit at the end of the year would be $101 million.

But Dion said such a projection may not be reliable because the July and August numbers are relatively small. Months such as March and June, when the bulk of business taxes are paid, and April, when personal income taxes are due, can have a much larger effect -- good or bad -- on how much money the state takes in.

The state's two leading sources of revenue, personal income taxes and sales taxes, both were down for July and August.

For the two-month period, income tax collections, mostly through payroll withholding, totaled $129.8 million. That's 5.8 percent behind last year's $137.8 million and 3.2 percent behind the budget project.

Sales tax collections totaled $147.0 million, a decline of 5.0 percent from last year's $154.7 million and 2.4 percent off what was budgeted.

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