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Late April Revenue Slowdown May Be Cause for Concern

As of April 27th, General Revenue (GR) collections, (net of refunds) for the month of April had declined by about $219 million or by 18.3 percent, compared to April 27th of last year. This results in a net GR growth rate of 0.4 percent for FY 2016 overall. This growth rate is well below the 2.8 percent growth called for the latest Executive Budget.

While this may be a cause for concern, several factors may explain the decline:

  1. The decline is concentrated in the Individual Income as well as the Corporate Income tax. Sales and Use tax has grown a respectable 4.6 percent for the month thus far.
  2. The tax filing deadline was April 18th as opposed to April 15th in 2015.
  3. April of 2016 has 21 working days versus 22 working days in April of last year.

In a “normal” month, the above factors would have a substantial impact on intra-month revenue comparisons. The second half of April, however, is characterized by high volume revenue collections dates as final Individual and Corporate Income tax returns are delivered to and processed by the Department of Revenue. It is likely that over the next week or so, the administrative factors mentioned above will diminish in importance and that net GR collections will improve markedly. Nonetheless, the overall revenue situation should continue the subject of close scrutiny.

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