The Budget is Final!

June 30th officially marked the end of the State’s 2009 Fiscal Year. While the expectation was that the state would fall below revenues received in 2008 (which fell short of projections itself), the question was how far below 2008 revenues would be. The answer came last week.

For FY09, the Department of Revenue tax collections were down $1.83 billion or 10.5% for the year.

For the fiscal year, individual income tax collections brought in $7.8 billion dollars, a decline of $1.09 billion or 12.2% compared to FY08. The state had projected a decline of approximately 7%. Income taxes comprise half of the tax revenues that the state receives and contributed heavily to the shortfall.

Sales and use tax revenues declined $438 million or 7.6% compared to FY08 bringing in $5.3 billion. Sales tax revenues account for approximately one-third of total revenue collections. While 7.6% was a significant decline, it was within the state’s projection.

Corporate income tax collections reported a decrease of $248 million or 26.3%. This category accounts for 4.4% of total collections. This decline was actually within projections as well.

Motor fuel taxes faced substantial declines in FY09, shrinking by $150 million or 14.8% compared to FY2008. The state is constitutionally obligated to fund motor fuel tax dependent activities to a level equal to motor fuel taxes collected in the prior year, meaning this shortfall was deducted from the Revenue Shortfall Reserve (RSR) at year end.

Lee Fleck
Roswell