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Revenues finish November ahead of projections

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2020 Revenue Assessment Report for December 2019. The Revenue Assessment Report, which is issued on a monthly basis, compares the adjusted general revenues by revenue source on a fiscal year-to-date and monthly basis to expected general revenues by revenue source. Expected general revenues are estimated by the DOR's Office of Revenue Analysis from the revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC). The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.

The revised FY 2020 estimate for total general revenues was effectively unchanged from the enacted budget, however, several components of total general revenues experienced significant revisions at the November 2019 REC. Among these were estate and transfer tax revenues, increased by $25.4 million; personal income tax revenues, $15.0 million higher; sales and use tax revenues, revised up by $11.7 million; insurance company gross premiums tax revenues, increased by $6.8 million; and cigarette and other tobacco products excise tax revenues revised up by $2.3 million. Substantive downward revisions were made to the lottery transfer, $(35.7 million); business corporation tax, $(20.3 million); departmental receipts revenues, $(5.0 million); health care provider assessment revenues, $(1.7 million); and motor vehicle license update fees and alcohol excise tax revenues, $(1.2 million) each.

November Year-To-Date Performance. On a fiscal year-to-date basis, the November 2019 report shows that adjusted total general revenues lead expected total general revenues, based on the revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC), with adjusted total general revenues $13.8 million more than expected total general revenues, a variance of 0.9%. The largest drivers of this overperformance were personal income tax revenues, which were $7.2 million above the revised estimate, or 1.3%; insurance company gross premiums tax revenues, which were $5.0 million more than revised expectations, a variance of 16.7%; departmental receipts revenues, which led the revised estimate by 3.6%, or $3.1 million; and business corporation tax revenues, which were ahead of the revised estimate by $1.4 million, or 3.6%. Shortfalls in adjusted revenues include estate and transfer tax revenues, which were $2.1 million below revised expectations, or 5.0% and cigarette and other tobacco products excise tax revenues, which trailed the revised estimate by $1.4 million or 2.3%.

Regarding November year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: Fiscal year-to-date adjusted total general revenues through November were ahead of expectations by $13.8 million, or 0.9%, a good start out of the gate post the November 2019 REC; Adjusted personal income tax revenues were $7.2 million above expectations, a variance of 1.3%, due largely to strong personal income tax final payments, which were $4.2 million above the estimate, a difference of 11.4%, and lower than expected personal income tax refunds and adjustments, which were $2.5 million less, a variance of 5.6%; Adjusted sales and use tax revenues through November were essentially in line with expectations posting a modest overage of less than $1.0 million; Fiscal year-to-date adjusted insurance company gross premiums tax and business corporation tax revenues were a combined $6.3 million above the fiscal year-to-date through November estimate, a variance of 9.3%; Departmental receipts adjusted fiscal year-to-date through November revenues were $3.1 million above expectations or 3.6%; Adjusted estate and transfer tax revenues were $2.1 million behind the estimate, down 5.0% and adjusted cigarette and other tobacco products tax revenues were $1.4 million below the revised fiscal year-to-date estimate, or 2.3%.

November Monthly Performance. For the month of November, the report indicates that adjusted total general revenues were also $13.8 million above expectations for the month or a variance of 4.9%. The change in methodology employed by ORA post the November 2019 Revenue Estimating Conference effectively makes November the first month of the November 2019 through April 2020 reporting period so the nominal differences for the monthly revenues are the same as the nominal differences for the fiscal year-to-date revenues. The variances, however, will be larger for the monthly revenues due to the smaller base from which the nominal differences are measured.

The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2020, under the State Reports tab.

Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at paul.grimaldi@revenue.ri.gov or by phone at (401) 574-8766.

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