Unwrapping December’s Revenue Report with Cautious Optimism

December 15, 2023

On Friday, December 15th, the Tax Commission published their monthly revenue summary (detailing collections according to tax type) in conjunction with the Revenue Snapshot from the Legislative Fiscal Analyst and Governor’s Office of Planning and Budget (comparing collections to revenue estimates). Through five months of the fiscal year, the state’s General, Income and Transportation Fund revenues totaled just over $4.5 billion, up 2.1% over the same time last fiscal year. The most recently updated yearend projection for all state sources expects to have a slight contraction from last year’s astronomical revenue.

General Fund performance continues to squeak past expectations. While sales tax growth has been weak, other sources of revenue are doing well, which may suggest that people are spending less on goods and more on services. We will find out the coming months if last minute holiday shoppers can buck this trend. As with last month, the star performer for the General Fund is investment income, up 156% over FY 2023. Severance Tax from all extractive industries is down roughly 35%.

Individual Income Tax lags, posting a (2.3%) reduction from last year at this time. Withholding growth has slowed but remains positive, a testament to the labor market in Utah. Corporate Tax is also up 27.8% over FY 2023, far exceeding the annual expected negative growth rate of (4.8%). The General Fund’s anticipation provided by the the holiday shopping season is now rivaled in the Income Tax Fund by SALT payments. Quarterly state and local tax (SALT) prepayments should show up in January’s report and will provide a better picture of the Income Tax Fund performance.

As always, the first half of any fiscal year is quite volatile and makes comparisons difficult. December’s report details collections that took place in November for sales and wages that were collected prior to that time. When the Legislature convenes in January, economists will again revise revenue estimates to ensure the state adjourns with a balanced budget.

The reports referenced in this post are available at the following links:
December Revenue Snapshot (FY 24)
Tax Commission Revenue Summary (Period 5, FY 2024)
Revenue Publications Archive