The Legislative Fiscal Bureau announced Wednesday that preliminary reports on tax collections for 2001-2002 are less than previously estimated.
Bob Lang, bureau director, said preliminary collections total $10.02 billion, which is down $189.5 million–or 1.9 percent–from the projected collection numbers.
In a letter to the Joint Finance Committee, Lang said, “Most of the variance was due to the individual income tax, which was $213.8 million lower than estimated.”
“In addition, cigarette tax revenues and estate tax revenues were lower than the estimates by $7.6 million and $2.4 million, respectively,” he continued.
The decreases in collected revenue were offset by corporate income–sales, insurance and miscellaneous tax collection.
Collections are down for this fiscal year, which ended June 30, but the Bureau had forecast lower numbers in January.
The decrease has been blamed on the 2001 recession that peaked following the Sept. 11 terrorist attacks, as well as reduced income-tax rates and increased generous exemptions.
Rob Reinhardt, program supervisor for the Legislative Fiscal Bureau, noted that this is only the first year in the biennial budget period.
“It is $190 million less than we projected,” Reinhardt said, “which is much less money than we predicted, but there is still a positive balance in the budget. But it is still much less than we thought it would be.”
Reinhardt said the bureau would look at collection numbers again in January to see if the budget needs to be revised.
“It is possible that spending could increase or revenue could come out differently than we thought,” he said. “This is bad news, obviously, and in a sense, this is quite a bit lower than we projected. But there is no deficit, and we will continue to monitor the process.”