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.
"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.