Provided by Hannah News Service
Lower than expected income tax refunds drove tax collections a quarter billion dollars over estimates in February, according to preliminary figures from the Office of Budget and Management (OBM).
Income tax collections of $301.9 million were more than 150 percent above estimates because of the fluctuation in refunds. For the fiscal year so far, income tax collections are 11.7 percent or $669.1 million above estimates, reaching more than $6.3 billion total.
Sales taxes also beat estimates, bringing in $20.2 million or 2.5 percent more, with roughly equal contributions from the non-auto sales tax ($11.1 million or 1.6 percent above estimates) and auto sales tax (up $9.1 million or 7.9 percent). Sales taxes so far this fiscal year are ahead of estimates 3.8 percent or almost $308 million.
The Commercial Activity Tax (CAT) was up 12.1 percent or $45.8 million, bringing in almost $426 million total.
Total tax revenues of $1.9 billion in February were $264.2 million or 16.1 percent ahead of estimates.
For the fiscal year so far, total tax collections of almost $17.7 billion are ahead by just over $1 billion or 6.5 percent. `
Compared to last year, tax collections this February were about on par with February 2021, up 0.2 percent, but for the first eight months of FY22 are up $765.5 million or 4.5 percent from the comparable period in FY21.
In a phone interview, OBM Director Kim Murnieks told Hannah News the refund picture might change in later months of the filing season, but generally the state expected to pay out higher refunds because of tax cuts enacted last year. Overall income tax collections are doing well, with strong withholding throughout this fiscal year, she said.
On sales taxes, Murnieks said the budget was designed to anticipate a reversion to more normal spending patterns after federal fiscal stimulus worked its way through the economy, but she said it’s too early to know if February’s relatively smaller overage is the start of that trend.
“I think we are in a very strong position going into these last four months of the current fiscal year, and you know, we’re a third through the fiscal biennium and everything is going very well,” she said.
Asked about the potential effects of the Russia-Ukraine War, Murnieks said she always notes in budget testimony the potential of geopolitical events to affect forecasts.
“The global situation and any negative outcomes there can be a risk to any economic forecast. Now, Ohio, our economy is not overly dependent on economic activity with either of those countries directly, but obviously energy prices are something that every Ohio family will feel the impact of,” she said.