State tax collections for the months of October and November were higher than expected by $51.8 million, the state’s economic and revenue forecaster said Monday.
When the current budget deficit is $2.6 billion, that might not seem like much. But Arun Raha, the executive director Economic and Revenue Forecast Council, said it is better than the past trend of declines.
Raha told the Senate Economic Development, Trade and Innovation Committee the numbers are “the first time we have a positive variance since I have been chasing the numbers down for a year and a half.”
Much of the improvement comes from property tax collections that came in later than normal. Raha attributed that to delayed collections for property in distress from foreclosure or other reasons. But he said overall collections were up slightly as well.
Raha said the collections don’t include Christmas sales, which he said look to be higher than he forecast in November. Christmas sales look to be up 3.6 percent over last year – compared to his best guess of 2 percent – and next month’s tax collection report may be up even more than the past two months, Raha said.
“I think it was the phenomena of pent-up demand,” he said of holiday sales. “People said, ‘Oh well, who’s going to suffer for two years. Let’s go buy something.’”
Peter Callaghan, The News Tribune