The final report from the state Department of Revenue Services is in, and collections in the fiscal year that ended June 30 were up by $1.9 billion from the year before — a 14.9 percent hike.
An earlier version of this blog post said a huge jump of $2 billion looked like good news, since the tax increase was $1.5 billion, so it seemed that economic activity might have accounted for a nice bump-up.
Alas, on closer review the news is less than stellar. With refunds, largely from the income tax, total state taxes and fees came in at $14.6 billion, up from $12.7 billion in fiscal 2011.
Within that $1.9 billion increase was $400 million in added collections from hospitals and nursing homes, which was shipped back out to hospitals and nursing homes as part of a move to get more federal dollars.So it doesn’t really count as an increase at all.
That leaves an increase of $1.5 billion, and the budget had built in an assumption that collections would rise by about $250 million as a result of added activity.
The bottom line: State tax collections came in under budget by more than $200 million, perhaps as much as $300 million. That’s why the state is expected to end the fiscal year with a deficit of about $200 million.
The biggest nut, the state income tax, came in at $7.37 billion, after refunds — an increase of 14 percent. Unfortunately, that was more than $300 million under the expected amount.
On the bright side, the $3.9 billion sales tax came in about $100 million over the expected amount.
“What we saw last year was that there was a return of consumer confidence,” said state Revenue Services Commissioner Kevin B. Sullivan. “How much of that was you and me buying and how much was corporations buying, I don’t know.”
Real estate transaction fees were also up, indicating more home sales.
The corporate earnings tax came in about as expected, but less than in the prior fiscal year. “That’s a sign of underlying weakness in the economy,” Sullivan said, as the companies paying the earnings tax are “C Corporations,” typically the larger, more established businesses.
The estate tax was off by $52 million to $175 million, as multi-millionaires either didn’t die at the same pace, or moved elsewhere to do so, and avoid the tax
And the motor fuels tax, at around $500 million, came in somewhat below target.
The cigarette tax, which amounts to a huge levy on the poor, rose by 3.4 percent to $418 million, even after the per-pack tax jumped by 13 percent to $3.40.
That created about $25 million of shortfall, which is a good thing — it means people smoked a bit less.
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