The Department of Revenue released its monthly revenue report for June yesterday, a document that also includes the fiscal year-end report, and the numbers were a bit of a surprise.
June turned out to be a much bigger than expected month, $240 million more than last June and $149 million above what was expected for the month. This robust performance more than erased what looked like a $70 million revenue shortfall at the end of May, and put the revenue ledger for FY10 $78 million into the black.
The FY10 collection was $18.538 billion, up from the FY09 collection of $18.259 million. Not much cause for celebration, though, when you recall that in FY08, the revenue collection was $20.88 billion, back when capital gains tax revenue was pouring in. The FY11 estimated collection is about $19.050 billion, so it will take a few more years before revenues return to the highwater mark of FY08.
Without the sales tax increase to 6.25 percent that took effect August 1, 2009, FY10 collections would have been less than FY09. Sales tax revenue of $4.612 billion in FY 10 was $743 million more than in FY09, and that pushed the total revenue collection higher than in FY09.
Signs of economic recovery were clearly visible in tax types tied to current economic conditions. In the fourth quarter of FY10, revenues grew 5.7 percent factoring out the sales tax increase compared to the fourth quarter in FY09, due to improvement in withholding, income tax estimated payments for tax year 2010, sales tax and corporate taxes.
The removal of the sales tax exemption for beer, wine and alcohol produced an estimated collection of $97 million in FY10, about $19 million higher than forecast. The volume of alcoholic beverages sold, as measured by the alcohol excise tax (a penny for a bottle of beer, 11-cents for a bottle of wine, etc.) declined 1 percent, which did not indicate a dramatic weakening in sales.