The Current State of Things
As I predicted in my March 25th post, Sales Tax Strategies During the Economic Disruption of the COVID-19 Outbreak, every state is revising its FY 2020 revenue forecasts in response to declining tax collections for March and April. [https://www.ncsl.org/research/fiscal-policy/coronavirus-covid-19-state-budget-updates-and-revenue-projections637208306.aspx] As reported by the National Conference for State Legislatures, some examples of these shortfalls include:
- Florida: Office of Economic & Demographic Research reported sales tax collection came in $12.4 million or .58% below monthly estimates.
- Illinois: Current fiscal year general fund revenues were revised to $2.7 billion below February estimates of $36.9 billion by the Governor's Office of Management and Budget (GOMB).
- Maryland: Comptroller Peter Franchot and the Bureau of Revenue Estimates outlined a shortfall of approximately $2.8 billion during the final quarter of FY 2020. The economic shutdown could also result in a loss of 59% of all sales tax revenue in a month, or almost $250 million.
- New York: In a letter to Governor Andrew Cuomo (D), State Comptroller Thomas DiNapoli estimated tax revenue would be between $4 billon and $7 billion below projections for fiscal year 2020. New York’s fiscal year ended on March 31.
- Pennsylvania: According to the Independent Fiscal Office (IFO), April revenue collections were down by $2.16 billion, or 49.8% less than projections released in August 2019. Sales and use tax collections fell short of estimates by $357.3, or 35.9%.
- Texas: Texas Comptroller Glenn Hegar reported April state sales tax revenue dropped by 9.3% from April 2019, the state's steepest decline since January 2010. Sales tax revenue accounts for 57% of all tax collections in Texas.