Revenue Deja Vu: May Collections Mirror Previous Two Fiscal Years

May 17, 2024

On Friday, May 17th, the Tax Commission along with the Legislative Fiscal Analyst and Governor’s Office of Planning and Budget released the latest revenue monitoring reports, detailing collections through May 9th. Through 10 months of the fiscal year (FY), revenues to all state funds have kept pace with the astronomical collections observed during tax season of FY 2022. While stalled revenue growth can make budgeting a challenge, economists have prepared the policy makers with accurate revenue forecasts, correctly projecting the 0.1% revenue growth to all sources seen through May. The tradeoff of living in a world without pandemic stimulus is that revenue growth is limited, but also far more predictable.

The General Fund posted a 3.7% growth rate year-over-year (YoY) thanks once again to our friend, investment income. While a revenue surplus is off the table for this year, previous General Fund surpluses are providing insulation for current economic conditions through the investment of rainy day funds. Sales Tax is up 1.5% over FY 2023, while Oil and Gas Severance Tax is down (37.4)% YoY.

In the world of Income Taxes, withholding remains positive (underscoring the strength of Utah’s labor market) while final payments are down (22.7)% compared to last May. While the Income Tax Fund lags the forecast by .06%, legislative economists know that the only thing reliable about final payments is that they are unreliable. As such, during the 2024 General Session, policymakers treated $150 million as high risk revenue, which was appropriated contingently and can be rescinded in the case of a shortfall. For more information, check out the 2025 Budget Slideshow and Economic Update to EAC from earlier this week.

The reports referenced in this post are available at the following links: 
May Revenue Snapshot (FY 24)
Tax Commission Revenue Summary (Period 10, FY 2024)
Revenue Publications Archive