For the first two months of the 2015-2017 biennium, tax collections are below forecast.
"August was not a good month for revenue collections," state budget director Pam Sharp told the Legislature's Budget Section. She says, for example, August sales tax collections were $44 million under forecast. And for the first two months of fiscal 2016, the sales tax collections were $52 million under forecast.
"I think what is happening is we're seeing a severe decrease because the number of decreased (oil) rigs in the state," said Sharp. "That is showing up in the sales tax."
The May revenue forecast predicted $246.5 million in sales tax for July and August. The actual collections were $194.4 million.
House Majority Leader Al Carlson (R-Fargo) says lawmakers saw this coming – and he says it bears watching, to see if it’s a trend over the next several months. Carlson says the downturn in oil is starting to show up in tax collections.
"I think we're going to see a significant drop in both the corporate and the personal income tax, as well as sales taxes on all these items," said Carlson. "This is time to waive the flag and say, 'Be careful.'"
Sharp says if it turns out to be a trend, OMB will ask for a new revenue forecast.
