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State tax collections are falling short of expectations

By ANDY LUDLOW GateHouse Ohio Media Published: June 7, 2017 4:00 AM

State tax collections continued to fall short of expectations in May, raising the specter that lawmakers may have to patch a bigger-than-anticipated hole as they craft the new two-year budget.

The Senate already needed to come up with more money and cuts to account for an $800 million shortfall -- about $170 million more atop House-passed reductions -- and Tuesday's numbers do not make its work any easier.

The Office of Budget and Management reported Tuesday that May tax collections came in $67 million below estimates, putting total general-revenue fund tax collections $840.8 million or 4.1 percent below estimates for 11 months of the fiscal year ending June 30.

Tax collections last month were off 3.3 percent -- notably smaller number than prior months -- led by a personal income-tax take that came in $88.8 million or 13.8 percent below projections.

Tax collections have come in under estimates for nine of the past 10 months. Income-tax collections now total $643 million or 8.6 percent below estimates for the fiscal year.

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As compared to last year through May, the state has taken in $550.3 million less in revenue. But, the spending of less money that projected likely will avert the need for any year-end cuts to the current budget, which expires in 24 days.

The Senate already was wrestling with less money to work with in the biennial budget and shopping for ways to ease a crash crunch that critics blame on a series of Gov. John Kasich-led income tax cuts, particularly for businesses.

Senate Republicans already were eyeing potential reductions in funding or freezes for some school districts and could double across-the-board cuts of 1.5 percent made by the House to many state agencies.

Complications also remain with Kasich and the Senate displeased with the House counting on $106 million more in gambling revenue by extending video poker to racinos and an accounting maneuver by the House pushing a $184 million Medicaid payment into the next budget to save money.

The Senate is expected to vote on the budget by mid-June, sending to a conference committee with the House to hammer out a final version. New revenue estimates for the next two fiscal years are expected on June 23 and could heighten the need to make more spending reductions.


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