Through the end of February, revenues from all taxes were on target, representing an increase of $571 million over FY 2019. Sales and use tax grew by 7% over the previous year, and income tax collections were 8.9% higher than February 2019. However, impacts to revenues from COVID-19 related business closures and layoffs are not reflected in these collections due to timing differences in reporting and collections. Some of those dampening effects may be seen in the April TC-23 report, which will report on March activity. However, it will likely be May or June before tax collections will reflect the actual impacts to revenue from recent changes in the economy. In the meantime, weekly unemployment insurance claim reports produced by the Division of Workforce Services provide the closest to real-time indication of economic activity.
It’s worth noting that upon entering this time of economic contraction, Utah was ranked first for economic momentum in both the last quarter of 2019 and first quarter of 2020 according to State Policy Reports. Utah has also incorporated into its normal budgeting process Stress Testing to better understand and prepare for unforeseen downturns in the economy.