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REPORT NO. 132, VOLUME 48-- MONDAY, JULY 13 2009 JUNE REVENUES TAKE SHARP FALL; REVENUES OFF TARGETS BY $120M With state revenues from June's tax collections down by 16.2 percent from the same time in 2008, state revenues are now $120 million below revised monthly targets, figures released by the Senate Fiscal Agency showed. The numbers were released as legislators are returning to session, following a two-week break, with the focus on resolving the budget for the 2009-10 fiscal year that starts on October 1. June's revenues marked the sixth month in the last eight that revenues collections were below the previous year's by 10 percent or more, the SFA said. June's revenues totaled $1.6 billion. In June 2008 the state collected $1.94 billion, up more than 20 percent from June 2007 (though the state was still adjusting to the increase in the income tax rate adopted the previous October as well as the surcharge adopted to the Michigan Business Tax). For the fiscal year thus far, the state has collected $11.58 billion, down 13.4 percent from the $13.4 billion the state had collected by the end of June 2008. Equally troubling, revenues are running below forecasts that were adjusted downward in May as part of that month's revenue estimating conference. So far, actual collections are down by some $120 million, the SFA said, with that amount "spread fairly evenly between the general fund and School Aid Fund." Among the few bright spots in the revenue picture was sales tax collected on motor vehicle sales, which was up 30.2 percent from a year ago, netting $83.7 million. For the year, the tax is up by 12.9 percent, netting a total of $520.9 million. June was the seventh consecutive month taxes from vehicle sales were up in Michigan and the SFA acknowledged the reason why is a bit of a mystery. Vehicle sales nationally have been poor, but the SFA speculated part of the reason for the increase may be that more cars must be purchased than leased and that many auto workers who have early buyouts from the manufacturers are using their new vehicle vouchers. The sales tax overall collected $580.6 million in June, down 8.3 percent from the year before. Thus far in the fiscal year it has collected slightly more than $4 billion, down 9.4 percent from the year before. Without the vehicle sales included, the tax raised $496.9 million, down 12.7 percent from the year before. The income tax raised $612.6 million during the month, down 20.5 percent from the year before. The gross tax totaled $685.6 million, down 15.9 percent from the year before, but refunds were up by 62.6 percent to $73 million. For the year the net income tax collection is $3.7 billion, down 21.3 percent Gross collections total $5.69 billion, down 10.7 percent from the year before, but refunds have totaled $1.97 billion, up 19.8 percent. The MBT collected $189.1 million during the month, 10.2 percent higher than the year before. For the year it has collected $1.69 billion. There is no comparison to this point a year ago since the tax did not start until January 2008. The use tax collected $106.2 million during the month, down 13.7 percent from the year before. For the year thus far the tax has collected $708 million, down 21.7 percent from the year before. The tobacco tax raised $86.1 million, down 7.3 percent from June 2008, and for the year has raised $668.4 million, down .8 percent The state education property tax was down by 24.7 percent, raising $44.4 million, and for the year the tax is down by 27.1 percent, raising $412.2 million. The real estate transfer tax dropped 37 percent in collections compared to June 2008, raising just $8.5 million. For the year the tax is down by 40.2 percent, raising just $69.2 million. The oil and gas severance tax fell by 67.7 percent during the month, raising just $3.2 million. For the year, the tax is down by 45.5 percent, raising $33.8 million. The only other tax that saw an increase during the month was the state's insurance tax, which increased by 33.3 percent and raised $2.4 million. So far the tax is 3.9 percent for the year, raising $140.1 million.