Recent Revenues Coming in Below Governor's Budget Projections

Administration Projects Personal Income Tax (PIT) Revenue to Increase 12 Percent in Current Year.  The 2024-25 Governor's budget projects that PIT revenue will grow 12 percent this year, from $101.7 billion in 2022-23 to $113.8 billion in 2023-24. Over the first half of the year, availabe revenue data suggest PIT revenues are growing much slower than 12 percent. For example, income tax withholding, the largest component of PIT revenue, was running only 2 percent above 2022 levels as of the end of December 2023.   

January 15th Estimated Tax Payments Coming in About $3 Billion Short of Governor's Budget Projections. Collections so far in January continue to run notaby below Governor's budget projections. Individuals with substantial capital gains and other non-wage income make quarterly estimated tax payments to meet state tax requirements. As shown in the figure below, January estimated tax payments from these taxpayers are running well below targets needed to meet the Governor's budget revenue levels for 2023-24. (Almost all of the month's estimated tax payments, which are due on the 15th, are processed and reported by the 22nd of the month). This information would not have been known when the administration released the Governor's budget on January 10. Should incoming estimated payments maintain current trends, January would come in about $3 billion short of the targets needed to match the administration's recently released revenue estimates.

January Income Tax Withholding Also Running Short of Budget Target. Daily income tax withholding for January is running about $800 million below the monthly projections included in the Governor's Budget.