Legislative budget analysts say preliminary revenue reports for May show the state could wipe out the bulk of its red ink in the current fiscal year.
Excluding the temporary one-cent sales tax voters approved last year, the state brought in $673 million in general fund revenue collections in May, a 16.6-percent increase over May 2010.
If tax collections continue at this pace through the end of June, the fiscal 2011 budget’s current forecasted shortfall of $332 million would shrink to only $80 million.
According to the report, the increase is mostly due to a decrease in income tax refunds given in May this year, driving individual income tax collections up 50 percent over the same period last year. To date, income tax revenues have increased nearly 19 percent over last year.
Sales tax growth was minimal, increasing only two percent over last May. Collections have slowed compared to the seven-percent sales tax revenue growth witnessed during the first quarter of 2011.
The report cautions that June will likely be the defining month in determining the fiscal 2011 shortfall, since quarterly payments for individual and corporate income taxes are processed during that period.
Nevertheless, the report predicts that “most of the $252 million forecast gain will probably be maintained through the end of the fiscal year.”