State tax collections in the month of July were down a little more than half-a-percent from the same month last year, but Jeff Robinson of the Legislative Services Agency says there were three tax-processing issues at play.
“For the month of July, the headline was a small decrease, but it really was negatively impacted by some single events that hid what was really a positive month,” Robinson says.
For example, a change in state law meant about $11 million in state gambling taxes weren’t deposited in July. The month of July ended on a Saturday, which means about $20 million in sales tax revenue that would otherwise have been deposited in July will be deposited in state coffers in August instead. Finally, the state issued more school infrastructure refunds last month than in July of 2009.
“The .06 percent decline would have been a high, single-digit increase had we not had these three events,” Robinson says. “…This would have shown some acceleration in our growth.”
Robinson cautions, however, that growth is measured in comparison to last summer. “It was very bad last year at this time and this year is showing not great economic growth, but it’s showing growth,” Robinson says. “And that, compared to a time when we were having actual declines, is making this a good six, seven month period here.”
Iowans paid about $7.5 million more in personal income taxes to the state last month compared to July of 2009. “The biggest source of General Fund income for the state is withholding from people’s checks and that had a positive for the month, always a good time,” Robinson says. “We had a string of months in the late fall and winter and that almost never happens — in all the history we have — so getting back to a positive growth for withholding is significant.”
Corporate income tax receipts in July were $11.5 million of last July.