New York State’s tax collections dipped $1.2 billion for the first quarter of the 2018 fiscal year, another sign individual taxpayers are holding off on transactions as they await federal tax reform.

Collections of $18.6 billion from April 1 through June 30 were off 6.1% compared with the year-earlier period and $315.7 million below budget projections, according to cash report released by State Comptroller Tom DiNapoli Tuesday. Personal income tax receipts fell $1.5 billion, or 11.6%, for the three month period.

"Personal income tax collections are falling short of what was expected," says New York State Comptroller Tom DiNapoli.
"Personal income tax collections are falling short of what was expected," says New York State Comptroller Tom DiNapoli. Bloomberg News

"We're three months into New York's fiscal year and personal income tax collections are falling short of what was expected," DiNapoli said in a statement. “Taxpayer anticipation of federal tax changes has contributed to the decline.”

The report is the latest evidence that tax cutting efforts in Washington are having a ripple effect on state revenues. Analysts said anticipation of Trump administration's proposed tax cuts were a factor in California, where preliminary agency cash for fiscal year 2016-17 was $65 million below the forecast of $122.6 billion.

In New York, lower personal tax revenues were partially offset by higher-than-expected business tax collections, which rose $266.6 million, or 16.5%. Federal receipts jumped $1.2 billion, or 9.2%.

The state spent $41.1 billion for the first quarter, which DiNapoli noted was about $3.1 billion, or 8.3% higher than the same period last year. Significant spending increases included a $1.6 billion rise for Medicaid primarily from federal sources and a $767.1 billion increase for education.

New York’s tax collections for the 2017 fiscal year that ended on March 31 finished down $300.1 million, a 0.4% drop from 2016 and $600 million lower than budget projections. The state’s general obligation bonds are rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.

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