N.D. revenues beat forecast by $150M: Sales tax collections down in January, individual income tax revenue up
BISMARCK – Revenues streaming into North Dakota’s general fund are beating forecasts by $150 million so far during the current two-year budget cycle that began July 1, but not all categories of tax collections saw an increase last month, the director of the state’s budget office told lawmakers Wednesday.
The state started the current two-year budget cycle on July 1 with a general fund balance of $1.65 billion. After expenditures, the general fund is projected to end the biennium with a balance of $491 million – more than six times the $80 million forecasted at the end of the legislative session last May.
“So it is quite a big increase,” Office of Management and Budget Director Pam Sharp told the Legislature’s interim Government Finance Committee.
Sharp attributed the increase to a combination of revenue growth both before and after the session ended and extra funds turned back to the general fund.
Preliminary figures for January show sales tax revenue failed to meet projections by $12.6 million, or 10.4 percent. Sharp said that could be because of the timing of collections or because they were actually lower than anticipated, but she noted sales tax revenue for the 2013-2015 biennium to date is still 4 percent ahead of projections.
Sen. Terry Wanzek, R-Jamestown, said he’s heard agricultural loan officers say farmers are having a tough time showing profitable projections next year, and if commodity prices remain at current levels, equipment sales could be down. Sharp said the state’s sales tax projections are fairly conservative.
“I don’t think we’re going to like totally fall off our forecast at this point,” she said.
Individual income tax revenue collections have been “extremely strong,” Sharp said, with the state collecting $33 million more in January than forecast, a 55.8 percent increase.
Overall, revenue collections are up $151.3 million, or 8.9 percent, over projections for the biennium to date and 19.2 percent above collections at the same point in the previous biennium.
Sharp also gave committee members an update on several special funds. The most recent balances were $583.5 million for the Budget Stabilization Fund, $1.77 billion for the Legacy Fund, $409.8 million for the Foundation Aid Stabilization Fund, $567.6 million for the Property Tax Relief Fund and $1 billion for the Strategic Investment and Improvements Fund, though $888 million of that fund is already obligated.