Provided by Hannah News Service
Tax revenues beat estimates by more than $15 million in August, with sales tax figures diminished by payments to counties but more than offset by stronger than expected income tax collections, according to preliminary figures from the Office of Budget and Management (OBM). Two months into FY22, the state is $40 million or about 1 percent ahead of projections with roughly $4.3 billion collected.
“It’s a good start to the fiscal year. We’re pleased with where we are,” OBM Director Kim Murnieks told Hannah News.
Sales taxes yielded $1.05 billion versus $1.07 billion projected, lagging by $18.9 million or 1.8 percent. Within that category, non-auto sales tax was off by $19.6 million or 2.2 percent, while auto sales tax was up by 0.4 percent or $672,000.
Murnieks said the non-auto lag does not reflect actual underperformance but the effect of the state's sending money collected under county add-on sales taxes to those local governments. Money from permissive county sales taxes is collected by the state and sent to counties two months later, so strong sales tax performance earlier in the summer is resulting in higher payments to counties now.
However, Murnieks said OBM is watching that sales tax figure closely, given some national data on declining consumer confidence as a result of the Delta variant of COVID-19. “Our economic resurgence is very much depending on getting through these months of the pandemic and getting Ohioans back to work,” she said.
Auto sales tax figures continue to be driven higher by the limited supply of cars and resulting price increases, particularly in the used car market. “It’s just a function of supply and demand, economics 101,” she said.
Income taxes brought in $766 million versus $742 million projected, coming in ahead by $24.1 million or 3.3 percent.
The Commercial Activity Tax (CAT) was ahead by $8.8 million or 2.5 percent, bringing in $355.8 million versus $347 million expected.
The net result from those major tax revenue categories and several smaller ones was collections of $2.34 billion, over estimates by 0.7 percent.
“FY22 is off to a solid start. Through the first two months of the biennium, General Revenue Fund tax receipts are $40 million ahead of our budgeted estimates. Our state’s continued economic resurgence depends on controlling COVID by ensuring that everyone who can be vaccinated, is vaccinated and by continuing the proven measures to keep Ohio’s workforce healthy,” Murnieks said in a statement accompanying the preliminary data.
August tax collections were $103 million or 4.6 percent ahead of where they were a year ago.
Tax collections for FY22 so far are behind by almost $380 million when compared to this point in FY21, but that’s owing to COVID’s disruptions to the 2020 filing season. Federal and state officials pushed the filing deadline from April to July, pushing a substantial chunk of FY20 income tax revenue into the beginning of FY21. As a result, July 2020 income tax collections were $550 million higher than a year earlier.
“If you look at the total here on a year-to-year basis, they are skewed by that very large -- unusually large -- July in FY21,” Murnieks said.