On Tuesday, May 12th, the Tax Commission released their TC-23 Revenue Summary Report for the month of May. Readers may recall that the April TC-23 report was summarizing collections made in March, for sales and wages which took place in February. Because of the lag between collections and reporting, this month’s Revenue Summary is the first look at measuring the impacts of the pandemic on tax revenues; including changes in travel, income, and sales which occurred in March.
Revenue sources to the General Fund were the least impacted by the pandemic during the reporting period. Sales and Use Taxes were up 6.7% over the previous Fiscal Year, exceeding the February consensus target of 6.2%. Through the first 10 months of FY 2020, the General Fund reached $2.4 billion in collections. Online sales tax revenues have likely helped the General Fund collections during the state’s required business closures. We expect this source will begin to show signs of COVID related softness next month.
The Education Fund targets in this report are adjusted to reflect the delay of income tax filing deadlines from April 15th (during Fiscal Year 2020) to July 15th (Fiscal Year 2021). After timing adjustments were made to revenue targets, actual Education Fund collections were 2.8% lower than the February consensus target. Income tax collections were 14.4% below the previous Fiscal Year, as a raw comparison ignoring changes to the normal tax cycle.
Combined, General and Education Fund collections in April are 7.1% below prior year collections and 1.7% below the target adjusted for delayed filing of income taxes. Transportation Fund revenues were below the consensus target from February, but remained 1.2% higher than FY 2019. Perhaps not surprising, Aviation Fuel tax was down -6.5% from the previous fiscal year. Consensus revenue targets will be updated in early June to capture new projections for the Utah economy resulting from the pandemic.