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Archive for Friday, November 2, 2001

Tax collections fall short this quarter

November 2, 2001

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— The state didn't receive any news Thursday from revenue collection figures to lessen the gloom hovering around budget discussions.

According to preliminary figures, the state collected $28.6 million less in tax revenues than anticipated from July 1 through Oct. 31. The figures were released by State Budget Director Duane Goossen.

They did contain a little good news: Sales tax collections were short of estimates by less than $1 million. Goossen acknowledged the gap could have been much worse, given the slumping national economy especially since the Sept. 11 terrorist attacks.

However, individual income tax collections fell almost $18 million short of expectations and corporate income taxes, $21.3 million short. Mineral severance tax collections were short about $4.5 million.

The revenue estimates were drafted in April. State officials, including Goossen and university economists, plan to meet at 1:30 p.m. today to draft new ones that legislators will use next year to craft the state budget.

They plan to revise the fiscal 2002 estimates and issue the first ones for fiscal 2003, which begins July 1, 2002.

"Nothing is on the way up," Goossen said. "There are no tax sources that are really outperforming expectations."

The state collected $1.31 billion in tax revenues between July 1 and Oct. 31, and forecasters had predicted collections of more than $1.34 billion. The state expects to take in about $4.5 billion in tax revenues during the entire 2002 fiscal year.

"We're anticipating that those will bring very unpleasant news of dropping revenue resources, and that we will have to make fairly drastic adjustments in spending," said Senate President Dave Kerr, R-Hutchinson.

Goossen said expectations for three revenue sources are likely to drop: corporate income taxes, mineral severance taxes and interest earnings.

He noted that the national economy was softening even before Sept. 11. Interest rates have dropped, as have corporate profits.

Two other key sources of money for the state are its 4.9 percent sales tax and individual income taxes.

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