Tax Collections Falter

Arizona’s coffers failed to benefit from the Christmas season in 2007, as retail sales tax collections were about the same as December 2006 but more than $32 million less than expected. The latest monthly report from the Joint Legislative Budget Committee also shows a 29% decline in corporate income tax revenue compared to December 2006. Total state revenues in the first six months of fiscal 2008 are $393 million less than expected in budget projections. Total general fund revenues in December were $871.5 million, down 4.3% from December 2006 and $84.3 million less than expected when the fiscal 2008 budget was prepared in June 2007. Sales tax revenues totaled $362 million in December, $131,000 less than last December’s collections. Arizona’s corporate income tax generated $120 million in December, down $50 million from December 2006 and $37.8 million less than anticipated.  The committee cites statistics from the Real Estate Center at Arizona State University showing the sale of existing single-family homes fell 28% in December, along with a 7.3% decline in home prices. The number of single-family home construction permits issued in the state fell 42% in the last three months of 2007 compared to the similar period in 2006.