By GARRY RAYNO, InDepthNH.org
CONCORD — State revenues continue to be higher than expected in one of the most important months for business taxes.
Business taxes were not the only positive signal for the state’s revenue picture as revenues totaled $701 million, $24.6 million above estimates.
Revenues for March include the statewide education property tax of $363.1 million, which is a state tax, but remains in local communities and is not sent to the state.
Without the state property tax, other state revenues totaled $337.9 million for March.
For the year-to-date, state revenues are $2.062.8 billion, which is $158.3 million above budget writer’s estimates and $181.5 million more than a year ago. When a $30.8 million adjustment is made for revenue collected this fiscal year, but credited to the 2020 fiscal year, state revenues are $127.5 million more than estimates for the year-to-date.
Business taxes continued to trend upward for March at $116.3 million, $11.6 million more than the budget plan developed for fiscal 2021. For the first three quarters of this fiscal year, business taxes total $579.9 million, which is $100.7 million over plan, and $118.1 million more than collected a year ago.
According to the Department of Revenue Administration, “the monthly revenue for March 2021 represented a decrease in return payments offset by an increase in estimate, extension, and tax notice payments along with a decrease in refund payments over the same period last year, primarily related to partnerships.”
The tobacco tax also continued to perform better than anticipated producing $18.5 million for March, $2.3 million more than estimates. For the year, the levy has produced $183 million, or $31.7 million more than estimates and $31.6 million more than a year ago.
Another tax that produces large numbers in March is the insurance premium tax which returned $123.6 million, or $8.6 million above estimates. For the year, the tax has produced $144 million, which is $8.8 million above estimates and $6.4 million more than a year ago.
According to the Insurance Department, the results reflect revenues that should have been collected in February, growth in the tax base, and higher fees.
The state’s second largest revenue producer, the rooms and meals tax, continues to be negatively impacted by the coronavirus pandemic.
The tax returned $23.1 million, $4 million below the budget plan. According to DRA, hotel activity was down 27 percent from a year ago, while meals were down 15.7 percent.
For the year-to-date, rooms and meals revenue totaled $235.6 million, which is $61.7 below estimates for this fiscal year and $45.9 million less than a year ago.
The real estate transfer taxes continued to perform above estimates by $4.1 million for March and securities revenue was above plan by $1.9 million.
Performing below estimates for the month were lottery revenues, after a good run with high national jackpots, and interest and dividends returns.
The Highway Fund rebounded a bit in March producing $21.1 million, which is slightly above estimates for the month, but for the year, the fund has collected $182.1 million, which is $7.7 million below plan.
The Fish and Game Fund has produced $9.5 million for the year to date, which is $1.2 million more than estimates and $1.6 million more than a year ago, although collections in March were slightly below the revenue plan.
Despite the good revenue figures this fiscal year, the state may have to draw money out of its $115 million rainy day fund to cover the fiscal 2020 deficit due to the economic slowdown resulting from the pandemic.
But if the upward trend continues, that may not be the case with three months of the 2021 fiscal year remaining.
The House will vote on its proposed $13.67 billion two-year budget plan Wednesday and if it passes, Senate budget writers will begin work on their proposal.
A new budget needs to be in place when the current fiscal year ends June 30.
Garry Rayno may be reached at email@example.com.