State revenue projections revised up by $57 million

Rhode Island lawmakers got good budget news Friday as state revenue collections for this year and next were revised up by $57.4 million.

The more favorable projections – produced by the semiannual Revenue Estimating Conference of state budget officers – continues a run of mostly growing state revenues since the COVID pandemic.

The spring revenue estimates kick off the final stages of state budget negotiations, and the positive numbers mean lawmakers will have $57 million more in revenue than Gov. Dan McKee assumed in his January budget proposal.

Better-than-expected tax collections from businesses this year were largely responsible for the total revenue boost.

Revenue for the year ending June 30 was revised up by $47.7 million compared with the previous estimates from November.

Revenue for the year starting July 1 was revised up $9.7 million from the November projections.

Strong collections of taxes on businesses more than offset declining personal income tax collections over both years, according to the new projections.

In the current fiscal year, corporate, utility, banking and insurance taxes were revised up by a combined $88 million, while personal income tax collections were revised down by $69 million.

Sales tax collections beat expectations by $11 million.

Departmental receipts, a catchall for revenue for fees, fines, legal settlements, sales and interest, was revised up by $21 million for this year.

Looking ahead to the next fiscal year, the analysts expect total state revenue to exceed $5.46 billion.

They revised down expected personal income tax collections by $54 million and revised up combined business tax collections by $42 million.

Sales tax collections are now expected to come in $20 million higher than the November projections.

“I’m pleased that we are not facing a drop-off in revenues like others states,” House Speaker K. Joseph Shekarchi said in an email. “However, these modest revisions need to be viewed within the context of the major budget proposals that are pending before us, as well as the many priorities not reflected in the Governor’s current proposal.”

Senate President Dominick Ruggerio said he was “encouraged” by the numbers “in light of the challenges many other states are facing. Over the next few weeks, we will work to responsibly balance these competing priorities and put forth a budget that best serves the needs of all Rhode Islanders.”