September 20, 2021
In this post, we provide an interim update to our formal revenue outlook for 2021-22, which was published in May. Using the methods discussed here, this interim update adjusts our May outlook to account for the most recent revenue and economic data and then compares this update to 2021-22 budget act assumptions.
We currently project that there is a strong chance that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—will exceed the budget act assumption of $170 billion in 2021-22. Our current best estimate is that the amount of unanticipated revenue likely will fall somewhere between $5 billion and $25 billion. As reflected by the width of this range, with so much of the fiscal year ahead of us there remains significant uncertainty about how much the state ultimately will collect. We also caution that the implications of unanticipated revenues for the state's budget are not straightforward. As we discuss here, an additional $1 of unanticipated revenue results in, on average, about $0.40 of additional state surplus.