DALLAS – Louisiana tax collections will be $129 million more than had been expected this year with another $155 million of previously unanticipated general fund revenue projected in fiscal 2014.
The outlook adopted Wednesday by the official state Revenue Estimating Conference will be the basis of the fiscal 2014 state budget. The House this week adopted a spending plan that relied on the revenue panel raising expected collections by at least $90 million.
The four-member panel accepted the general fund revenue projection by the Department of Administration of $8.1 billion in fiscal 2013 and $8.35 billion in fiscal 2014. The Legislative Fiscal Office projected collections of $8.13 billion fiscal 2013 and $8.28 billion next year.
Gov. Bobby Jindal in December 2012 ordered $165.5 million of cuts from the state’s $25 billion budget for fiscal 2013 when the conference cut its outlook for general fund revenues by $129 million and by $207 million for fiscal 2014.
The conference’s December 2012 forecast lowered expectations to total collections of $7.97 billion in fiscal 2013 and $8.2 billion in fiscal 2014, which begins July 1. General fund collections in fiscal 2012 totaled $8.07 billion.
Revenue from the individual income tax is higher than had been expected while sales tax collections are flat, said Manfred Dix, an economist with the Division of Administration.
“The individual income tax has recovered, and recovered nicely,” he said. “We’ve seen a surprising healthy growth rate since December.
“My hunch is that the labor market is doing fairly well in Louisiana,” Dix said. “At some point that had to start showing up in the data.”
The newly adopted forecast calls for $2.685 billion from the individual income tax in fiscal 2013, up from $2.48 billion in fiscal 2012. Collections in fiscal 2014 are expected to total $2.79 billion.
Growth in income tax revenue indicates that more people are working, but sluggish sales tax collections don’t reflect that, said Greg Albrecht, chief economist at the Legislative Fiscal Office.
“It’s lethargic out there,” he said. “It’s at least flat. People and businesses are holding back.”
Dix lowered projections from the general sales tax by $30 million in fiscal 2013 and $54 million in fiscal 2014.
“It’s most concerning,” Dix said. “Sales tax collections have shown flatness through the whole fiscal year. There has been no growth, and no signs of recovery.”
The sales tax is now expected to bring in $2.56 billion in fiscal 2013 and $2.67 billion in fiscal 2013. The December 2012 projection called for $2.59 billion from the sales tax this year and $2.7 billion in fiscal 2014.
Overall consumer spending may be flat, Dix said, but Louisianans are still buying vehicles at a rapid pace.
“People are just not buying, but if they are, they are buying cars,” he said. “People are buying lots of cars. The motor vehicle tax is very strong.”
Albrecht expressed amazement at the performance of vehicle-related taxes.
“I don’t know where people are parking all these cars,” he said.