State Revenue Act Monthly Receipts Fall by $53 Million
The State Revenue Council issued their report on State revenue for the month of June. It was not even reported in the local papers. But as I have been predicting for years, revenue act receipts were far below forecast – and things will get even worse in coming months. The State Revenue Act includes Sales Tax and B & O taxes. Below is the Revenue Act graph from page 4 of the ERFC July State Revenue Report.
Note the sharp drop from $900 million per month to $850 million per month. This equates to an annual decline of more than one billion dollars per year. The July 2011 ERFC Report stated “This month’s shortfall was the result of yet another decline in seasonally adjusted collections – the third in a row.” To be more precise, April receipts were 1,180 million, then fell to 861 million in May and 816 million in June – a drop of $364 million in just three months. Just a few weeks ago, the ERFC predicted that June Revenue Act revenue would be $869 million. So $816 million represented a drop of $53 million in just a few weeks.
The total decline was only $22 million below the previous ERFC prediction in June. But since this was the end of year report (the State fiscal year ends on July 1st) and since the prior report listed a NEGATIVE $84 million fund balance, the actual end of year July 1, 2011 balance will be about NEGATIVE $106 million – the worst end of year balance in the history of our State.
The ERFC claims that the economy will rebound in a few months from now. But they have been saying that “recovery is just around the corner” for the past several years. Anyone who still believes this nonsense is simply not paying attention. Tens of thousands of public servants in our State lost their jobs in July 1, 2011 due to billions in State budget cuts. Thousands more lost their jobs due to the ending of federal stimulus funding on July 1st. Then there are trillions in federal budget cuts coming up in August. Even this assumes a deal is reached on raising the debt limit. If a deal is not reached, it will be Great Depression time. Employment in our State remained stuck at 2.8 million, essentially where it has been for the past 2 years. Since the work force in our State is growing at 80,000 young adults per year, this means that the real unemployment rate keeps going up and up as 80,000 young people per year simply can not find jobs after they graduate from high school and/or college.
Expect the August and September Revenue Reports to get much worse. Our State is headed for a financial train wreck. And not one word about any of this is being reported by the corporate media. Next ERFC State Revenue update is due August 10th. Anyone want to place a bet on what that will look like???
Regards, David Spring M. Ed. email@example.com