Poor Connecticut. While the state’s fiscal woes are worsening, its New England neighbors are reporting increases over last year’s April tax collection numbers.
The tax revenue numbers are a sign that the regional economy may be holding up better than expected, and definitely better Connecticut’s economy.
While Connecticut officials have projected a deficit in the $70 million range as of June 30, the Massachusetts revenue department reported April revenue collections of $2.7 billion, a 17 percent increase over a year ago.
However, Massachusetts Revenue Commissioner Navjeet K. Bal warned that it is important to “exercise caution in analyzing the robust April collections.”
April Revenues Up
Rhode Island saw year-over-year revenue declines in January, February and March but rallied in April when the state brought in $189 million, $12.6 million more than it collected in April 2007.
New Hampshire collected $105 million in business taxes in April, which beat April 2007 by $10.3 million. The state, which doesn’t have an income tax, also brought in $50.8 million in interest and dividend taxes, $4.1 million more than last year.
Vermont also saw tax revenues increase. The state collected $146 million in personal income tax revenues in April, a 3.8 percent increase over the $141 million it collected in April 2007. And while the state collected 2.3 percent less sales and use tax revenue, its businesses sent $11 million to Montpelier last month. That’s a nearly 35 percent increase over April of last year.
Maine’s April tax collection figures were not available.
Bal of Massachusetts noted that the jump in tax collections in Massachusetts in April was “largely fueled by investors who apparently experienced sizable income growth. As history has proven, this kind of revenue growth is extremely volatile and not likely to carry forward.”
Recession Hits
In contrast, income went down for many corporations in Connecticut. As a result, the state’s corporate/business tax collections decreased $7 million compared with a year ago.
With fewer jobs, income tax revenue is also down.
State Comptroller Nancy Wyman expects that further declines in collections of the payroll and withholding portions of the state’s income tax will push the state’s budget into a deficit position.
Connecticut lost 7,200 jobs in the last three months and hasn’t posted a net job gain for the entire fiscal year. At this point last year, the state had added 10,800 jobs.
