On December 16th, the Tax Commission released the TC-23 revenue summary detailing the first five months of collections to state funds. The Education Fund remains a bit enigmatic, due to inflating factors (including federal stimulus and the income tax timing delay) which leave current year income tax collections trending off the charts. The General Fund posted a 4.9% growth rate from all sources, with this month marking the first period that the impacts of online marketplace facilitators can be compared between FY 2020 and FY 2021. Preliminary numbers from the Tax Commission indicate that marketplace facilitators brought in around $3.8 million more revenue to the state in October 2020 than in October 2019. The additional sales tax dollars from marketplace facilitators brought in an estimated $65.6 million during all of FY 2020, and to date have generated an estimated $47.8 million in FY 2021.
As expected, sales tax growth through the end of November moderated slightly from the previous reporting period, posting 9.6% growth over FY 2020 as compared to 10.2% last month. Other revenue sources to the General Fund are down, including severance taxes from mining and oil and gas, which posted a combined $10.9 million decrease in revenue compared to this time last year.
Income tax revenue collections to date are $885.3 million higher than last December, spurred mostly by the timing delay in income tax payments which postponed an estimated $785 million to the current fiscal year. Despite much uncertainty in how income taxes will continue to perform for the duration of the fiscal year, it appears that growth rates remain positive to the Education Fund. Estimates from Legislative, Governor’s Office, and Utah Tax Commission economists indicate that underlying the obscurity provided by the income tax delay is a 1.5% year-over-year (YoY) growth in revenue to all sources in FY 2021, and 6.5% YoY growth into FY 2022.
While the future of federal aid remains undecided, legislative economists estimate that previous pandemic stimulus packages have translated to $330 million in income tax revenue and $120 million in sales tax revenue in Utah. In the upcoming General Session, this combined roughly $450 million will be considered one-time revenue for budgeting purposes. Consensus revenue estimates released at the December Executive Appropriations Committee are contingent on several factors, including future federal aid and vaccine outcomes.
The reports referenced in this post are available at the links below:
December Revenue Snapshot FY 2021
TC-23 Revenue Summary (Period 5, FY 2021)