News Date: Wednesday, May 24, 2023
On May 24, the Independent Fiscal Office (IFO) released its initial revenue estimates for FY 2023-2024 and its updated revenue estimate for the remainder of FY 2022-2023. Specifically, the IFO estimates the state is slated to end its current fiscal year with almost $44.7 billion in revenue, which is an increase of more than $2.5 billion over what the Office had originally projected. Personal income tax (PIT), corporate profits and non-motor vehicle sales and use tax all experienced growth and outperformed initial estimates that had assumed declines in these revenue sources.
While this is good news for the current fiscal year, the IFO’s initial estimate for revenue in the coming FY 2023-2024 anticipates a relatively modest increase of 1.3% to approximately $45.2 billion. This would include an estimated drop in corporate income tax of 5.8% but assumes loan repayments beginning, offset by a projected $589 million growth in PIT collections, an increase of 4.7%, for FY 2023-2024.
Forecasters are still assessing several potential outcomes for the national economy over the next year, including at the time of the IFO’s presentation a potential debt ceiling impasse and possible Supreme Court ruling on student loan forgiveness.