First Half of FY 2020 in the Books
Reports for December and January show both General and Education Fund revenues coming in on-target, with collections for the first half of the year slightly higher than targets adopted in November. December’s numbers showed General Fund sales-tax collections slightly below the estimate, while January’s revenue performance was slightly above. Both months are within expected range projected by staff economists. The income tax-backed Education Fund was higher than point estimates in both months, but still within anticipated ranges. Consistent with longer-term trends, Education Fund growth rates continue to exceed General Fund growth rates, though the difference moderated somewhat in December due to holiday consumption patterns.
The first six months’ General Fund sales tax collections finished at 6.7% growth, 1.6% above the annual growth target of 5.1%. However, because the first six months of the Fiscal Year includes holiday sales, it’s ill-advised to compare the first six months to the entire year. Typically, sales tax growth rates tend to moderate over the course of the year. For example, in the first six months of Fiscal Year 2019, General Fund sales tax grew by 5.9% compared to a final growth rate of 4.8% for the year as a whole. For these reasons, caution should be used when drawing conclusions from the first half of any year’s tax collections. Additionally, volatility was expected this year due to policy implementation, such as that of third-party collection of remote sales.
For the December Revenue Snapshot: click here.
For the Fiscal Year 2020 6-month Revenue Snapshot: click here.