State revenue collections fell short of forecasts again in November — this time, by $15.7 million.
That means tax collections are nearly $63 million shy of projections for the first five months of the budget year. And it means lawmakers could face some tough budget decisions during the 2019 legislative session, which begins Jan. 7.
The revenue issue centers on individual income tax collections, which continue to sputter. Sales tax and corporate income taxes are coming in ahead of forecasts — but not enough to cover the difference.
The problem could be one of timing, Rebecca Boone of the Associated Press reported Monday. Taxpayers might not have adjusted their withholdings to align with changes in federal and state tax code. So the state could receive a spike in income tax collections in April — but even if that pans out, the money won’t come in before lawmakers have to set the 2019-20 budget.
In essence, lawmakers will have to predict whether they think the tax collections will pick up in the spring — or whether they anticipate a surge of taxpayers filing for extensions on their 2018 bills.
“This is unusual, a real outlier than what we’ve seen in the past several years,” Paul Headlee, the Legislative Services Office’s budget and policy analysis division manager, told the AP. “It’s really a timing issue, but that doesn’t help with the decision-making. It will make the upcoming budget-setting session more challenging.”
Once lawmakers decide how much tax revenue they think will come in, they will then decide on budget requests — such as the fifth and final year of the $250 million career ladder teacher pay plan.