Tax collections for state fiscal year (SFY) 2021-22 totaled $121.1 billion – $3.3 billion higher than forecast by the Division of the Budget in the amended executive budget financial plan released in February, and more than $30 billion higher than DOB’s initial forecasts from May 2021, according to the March state cash report released this week by New York State Comptroller Thomas P. DiNapoli.
Tax collections for SFY 2021-22 were $38.8 billion higher than the previous year. However, receipts in SFY 2021-22 include $16.4 billion in business tax collections from the new pass-through entity tax (PTET), which was not included in SFY 2021-22 enacted budget projections. PTET proceeds are expected by the Division of the Budget to be offset by lower personal income tax (PIT) collections in subsequent years. Excluding the PTET, overall tax collections were $13.6 billion higher than initial forecasts from May 2021.
“The state ended the fiscal year in a good position due to higher-than-projected receipts and lower-than-projected spending,” DiNapoli said. “I’m pleased to see deposits were made to the rainy-day fund reserves to set aside some of the state’s gains. Following through with plans to increase these formal reserves should remain a priority in light of continuing economic challenges and significant new spending commitments made recently in the enacted budget.”
PIT collections totaled $70.7 billion, exceeding prior year collections by $15.7 billion, or 28.5%. PIT collections exceeded February financial plan projections by $2.6 billion and projections from the enacted budget by $9.7 billion, supported by strong withholding collections as well as an extra collection day in March.
Consumption and use taxes, which include sales tax receipts, totaled $19.6 billion, exceeding the prior year total by $3.5 billion, or 21.7%. Collections were $363.3 million higher than the latest projections and just under $1.5 billion higher than initial projections.
Business tax collections totaled $27.7 billion, which was $18.9 billion higher than the previous year. This includes $16.4 billion in the PTET (which is anticipated to be offset by reduced PIT revenue in subsequent years). Not including the PTET, annual growth would have been $2.5 billion, or 28.5%. Total business tax collections exceeded the latest projections by $5.6 million and initial projections by $18.1 billion. Without the PTET, business tax collections would have exceeded the latest projections by $285 million and initial projections by $1.7 billion.
All funds spending totaled $209.3 billion, which was $22.8 billion, or 12.2%, higher than last year. Total spending was $3.6 billion lower than the most recent projections and $452.4 million higher than initial projections. The general fund ended the fiscal year with a balance of $33.053 billion, an increase of $23.9 billion from opening balance. This includes $4.5 billion of federal fiscal recovery funds made available through the American Rescue Plan. Financial plan management actions taken by DOB at the end of the year include:
√ $7.6 billion in debt service prepayments and debt defeasance, which was $4.7 billion higher than the most recent forecast;
√ $724 million set aside for public employee health insurance costs;
√ $843 million was deposited to the state’s two rainy day reserves, which was $32 million lower than anticipated; and
√ Undesignated funds in the general fund balance (refund reserve) totaled $29.7 billion, which was $2.6 billion higher than last anticipated. This includes $16.4 billion in PTET proceeds.