The state will have to draw from reserves to meet cash flow requirements this month, officials said Tuesday, despite general revenue deposits that exceeded expectations by almost 8 percent.
The revelation came one day after Denise Northrup, acting head of the Office of Management and Enterprise Services, told a House committee that December could be the first month in some time in which the state met its obligations without interagency transfers.
“That prediction was based on preliminary numbers from last week and has changed after receiving the final revenue numbers for this month,” Finance Secretary Preston Doerflinger said Tuesday.
“Final numbers required OMES to borrow $35.1 million to meet this month’s monthly allocations. That money has been borrowed from the remaining FY ’17 cash and will be repaid as collections allow.”
People are also reading…
Because tax receipts ebb and flow during the course of a year, coming up short in some months is not unusual, but it has become increasingly common recently and is one reason administration officials are pressing for changes in the tax system.
Doerflinger said deposits to the general fund for November were 7.9 percent above projections and 14.1 percent above the same month a year ago, but he attributed the gains more to new taxes and elimination of tax preferences than increased economic activity.
“It was a solid month for state revenue, and I’m glad to see we exceeded the estimate this period,” he said. “It should be noted, many of the gains we are seeing are not necessarily indicative of a strengthening economy. The strong showing this month appears to have more to do with law changes taking effect and boosting returns rather than economic growth.”
Recent improvements in general revenue collections come after three years of declines.
Deposits to the general fund for the month were $390.6 million, or $28.7 above the estimate and $48.2 million above the same month a year ago.
General revenue for the first five months of fiscal year 2018 is 1.8 percent above the estimate and 9.4 percent above the same period a year ago.
Personal income tax revenue to the general fund soared 33 percent, or $29.3 million, above the estimate, while sales tax revenue rose slightly and gross production taxes remained unexpectedly low.
