RI tax revenue forecast on track

Politics

PROVIDENCE, R.I. (WPRI) — State revenue is expected to come in on target this budget year, somewhat easing the challenge for Gov. Gina Raimondo as she prepares her next tax-and-spending plan, according to a new forecast.

The number-crunchers who took part in the state’s semiannual Revenue Estimating Conference announced Friday that state revenue should be about $70,000 higher in the current 2019-20 budget year than they projected the last time they met, back in May. That amount is effectively a rounding error in a nearly $10 billion budget.

However, the top-line stability masked some big swings under the hood. Income and sales tax receipts are growing more quickly than originally predicted, and inheritance tax revenue is now expected to come in at $63 million rather than $38 million. Yet corporate tax receipts continue to disappoint.

Gambling revenue is also on the decline, to the chagrin of budget officials.

In May, lottery and casino receipts were predicted to be $413 million in 2019-20, a healthy increase from the final total of $397 million in 2018-19. Now, however, gaming is only expected to bring in $377 million in 2019-20, which will put the category in the red year-over-year.

Sports betting is one culprit, with expected revenue cut once again. The forecast for this year was slashed from $23 million to just $9 million, and next year’s projection was set at only $16 million, as mobile sports betting fails to meet expectations.

The governor and lawmakers are required to use the Revenue Estimating Conference’s twice-a-year forecasts when they put together the annual state budget. The November estimates are used to create the governor’s initial proposal, expected in January. Then those numbers are updated in May so lawmakers can use the revised figures to finish the final budget, usually completed in June.

The new estimates show state general revenue is projected to increase this budget year versus last year, from $4.02 billion in 2018-19 to $4.18 billion in 2019-20. From there it’s expected to rise by about $63 million in the 2020-21 budget year, to $4.24 billion. (Budget years run from July 1 to June 30.)

However, early this year the Raimondo administration had estimated revenue in 2020-21 would be $4.29 billion, about $50 million higher than the new forecast. That suggests the governor will need to have a bigger budget deficit to close in January than the $80 million gap her advisers had projected back then.

A separate report due out next week, which takes into account the spending side of the ledger, will show whether the state is currently on track to run a deficit or a surplus this fiscal year.

Ted Nesi (tnesi@wpri.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Providence

Download Mobile Apps from WPRI 12
DOWNLOAD APPS NOW: Apple App Store | Google Play Store
PINPOINT WEATHER // Quick Links:

Impeachment Hearings

More Impeachment Hearings

Don't Miss

Community Events & Happenings

More Community
Live Cams on WPRI.com