State tax collections continue to exceed expectations

Approaching the midpoint of fiscal 2022, the state is in a strong fiscal position thanks to tax collections far exceeding expectations.

In early November, the Department of Revenue announced that tax collections for the first four months of the fiscal year totaled $11.1 billion, nearly 20% percent above collections through the same period of fiscal 2021. Thus far, fiscal 2022 collections have surpassed the forecast set in the state budget by $723 million, or 6.9%.

Meanwhile, initial work will soon begin on the fiscal 2023 state budget, with an annual consensus revenue hearing due to be convened by the governor’s budget team and the House and Senate Ways and Means committees sometime in December. At the hearing, the Department of Revenue and other fiscal experts and economists typically discuss the prospects for the economy and state revenues over the second half of fiscal 2022 and for fiscal 2023.

Following the hearing, legislative leaders and the administration are expected to reach agreement on a tax revenue forecast for fiscal 2023 that would be used in the governor’s budget recommendation, due to be filed in January, and the House and Senate budget plans that are customarily released in April and May, respectively.