Economic forum told revenues will rise in coming biennium
The Economic Forum was told on Thursday state revenues will continue to increase in the coming two-year budget cycle.
Analysts from the different agencies, the state Budget Division and the Legislative Fiscal Division laid out their estimates for the so-called major revenue streams and while there were differences, all three sources were pretty close together.
Those estimates will, however, be updated with the latest data before the forum meets Dec. 6 to actually make its projections.
Those projections, by law, must be used by the governor and lawmakers in building the state General Fund budget for Fiscal 2018 and 2019.
Overall, the estimates for major revenue sources were just more than $3.4 billion in 2018 and $3.5 billion in 2019 — increases of about 3.5-3.6 percent a year over the $3.1 billion those revenue sources generated in fiscal 2015.
Those totals don’t include all the other revenues that feed into the General Fund. Those revenues are projected to add about $280 million a year to the totals.
The major revenue streams are led by the sales and use tax at more than $1 billion a year and gaming percentage fees at more than $700 million annually. They also include the Insurance Premium Tax, Real Property Transfer Tax, Live Entertainment Tax, Modified Business Tax, Commerce Tax and Cigarette Tax.
December will be the first time the members of the forum review the Commerce Tax. That tax was projected to raise just shy of $120 million a year. But in it’s first year, the tax brought in $143.5 million. All three forecasters — Budget, Fiscal and the Department of Taxation — have projected it will bring in $160 million each year of the coming biennium.
Legislative Economist Russ Guindon said sales tax growth is soft because the tax is almost exclusively imposed on the purchase of goods while the economy continues to shift to greater reliance on services. Nonetheless, he and the Budget Office both predicted increases in 2018 and 2019 of better than 4 percent a year. Sales tax revenues are expected to generate more than $2.3 billion over the biennium.
Gaming Control Board Analyst Mike Lawton told the forum his projections are for “sustainable modest growth” through the biennium, “driven by slot win and non-Baccarat Game and Table win.” He said Baccarat is still too volatile and drives win up and down dramatically each month.
The Economic Forum is a five-member panel of financial experts appointed by the governor.