State Deputy Revenue Secretary Mark Muchow said personal income tax collections missed the estimate by $47 million last month, while severance tax collections for coal and natural also fell short.
Muchow said the revenue would have been much worse had it not been for the $26 million used from a special account during the month to pay off state income tax refunds. The state had $45 million in the account when refunds began going out earlier this year.
‘It’s been fully exhausted,” Muchow said. “We’re still paying out income tax refunds and we could have used more in that account than we had but certainly the $45 million there has helped balance this year’s budget and continue operations without any significant year-end budget reductions to date.”
The state usually pays income tax refunds from the general fund, but there wasn’t the money this year so they had to dip into the special account.
“It really made things easier in terms of maintaining government services this year and also paying income tax refunds in a timely fashion,” according to Muchow. “That $45 million came in handy.”
Muchow predicted the state will end the fiscal year at least $28 million below estimates in revenue collections and maybe more. The legislature did approve $28 million in spending cuts in the current state budget a few months ago. State law requires a balanced budget on June 30.
Muchow says there is cause for some optimism with the new budget getting started July 1.
“Natural gas prices in recent months have been rebounding,” he noted. “So natural gas severance is starting to rebound a little bit. If natural gas prices rebound there’s hope for more coal to be used in electrical power generation (on a regional basis),” he said.
It’s been a tough year for coal, and it shows in tax revenue the state collects. Muchow said it’s $38 million below estimate for the fiscal year.
