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In this post, we provide an interim update to our formal revenue outlook for 2022-23, which was published in November. Using the methods discussed here, this interim update adjusts our November outlook to account for the most recent revenue and economic data and then compares this update to 2023-24 Governor's Budget assumptions.

At the time of our November outlook, we cautioned that economic indicators were suggesting a slowdown could be on the horizon. More recent economic data—such as weak retail salesincome tax withholding, and other leading indicators—have continued to point in this direction. Consistent with this, our updated estimates suggest collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion. Half of the fiscal year, however, lies ahead of us and there remains significant uncertainty about how much the state ultimately will collect. Further, we caution that the implications of unanticipated changes in revenues for the state's budget are not straightforward.


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