On Thursday (Feb. 20th), the Governor’s Office of Management and Budget and the Legislative Fiscal Analyst released their updated 2020 Consensus Revenue Estimates. These estimates, along with the Tax Commission’s TC-23 Report for revenue collections to date, paint a picture of state financial status to date, along with expectations for the next 16 months. Both reports reflect a disparity in both total revenues to the General and Education Funds, as well as future projected growth rates.
The Tax Commission reports that collections from sales and use tax totaled $1.8 billion during the first seven months of Fiscal Year 2020, which is the largest contribution to the General Fund. Last fiscal year, the General Fund collections totaled $2.6 billion, a whopping $2.2 billion less than Education fund revenues. This discrepancy between funds is expected to grow to $2.5 billion by June of 2021, according to the Consensus Revenue Estimates.
For the current Fiscal Year, the Education Fund is expected to see an increase in ongoing available revenue of $518 million, which represents a $77 million boost over November’s estimate. This is on top of a projected one-time increase to the Education Fund of $323 million, resulting from expectations of strong income tax collections through the end of the fiscal year. GOMB and LFA agree that income taxes will continue to increase through the end of the Fiscal Year, moderating to 6.2% growth in FY 2021.