Last week the public got its first glimpse at FY 2016 state revenues, when the Department of Administrative Services released its Monthly Revenue Focus for July 2015. Overall, it was an encouraging report, with most key revenue sources yielding more last month than in July 2014.
The following data visualization is designed to help you understand the data. Within each tab, you can hover over each data point to view additional context. On the right side are seven radio buttons, which allow you to further investigate revenue trends by specific tax type or by total collections.
Below the visualization are a few of our insights.
(To view data in full screen mode or on a mobile device, click here.)
While it is premature to make any substantive conclusions about FY 2016, certain Committee of Conference revenue projections might be too gloomy.
While overall General and Education Fund collections were 11 percent higher in July 2015 than in July 2014, it is far too early to make any inferences regarding how revenues will perform throughout the rest of FY 2016. Taking an average of the last five fiscal years, July comprises only about 4.7 percent of the total amount the state collects in a given fiscal year.[i] As shown in the Monthly tab, the most important months for state revenue collections are September, December, March, April and June.
Nevertheless, July is a significant month for certain revenue streams. For example, meals and rooms receipts in July typically make up 9.2 percent of the entire amount collected by the tax in a fiscal year. Consequently, the fact that collections last month were 7.2 percent higher than in July 2014 is a sign that the positive trend from FY 2015, when revenues grew by 7.3 percent, could be sustained. If July’s healthy performance continues in August and September, the largest two months for the meals and rooms tax, then it will become more likely that the Committee of Conference’s projection of 5 percent growth in FY 2016 is too low.
The same dynamic is also happening with the real estate transfer tax, where July usually amounts to about 9.8 percent of the tax’s total fiscal year collections. Compared to July 2014, real estate transfer taxes grew by an astounding 42 percent last month. Though the Monthly Revenue Focus did not note anything unusual occurring in the month, unlike last December[ii], it is unlikely that this torrid pace will persist as we go through FY 2016. Yet, the 2.6 percent growth rate for the whole of FY 2016 assumed by the Committee of Conference may prove too tepid amidst today’s market conditions. According to the New Hampshire Association of Realtors, closed sales are up by 5 percent, while the median sales price has grown by 7 percent when comparing the first five months of calendar years 2015 and 2014.
With the release of the August revenue numbers in early September, NHFPI will publish its own version of the monthly FY 2016 revenue plan for various revenue sources.
Around the second month of each fiscal year, the Department of Administrative Services, with assistance from various other state agencies, typically creates a monthly revenue “plan” that allocates the current fiscal year’s revenue estimates over the 12 months that comprise it. This plan aids the analysis of how actual revenue collections are under or over performing what was projected by legislators and affirmed by the governor in HB1, which is commonly known as the operating budget bill.
Due to the lack of an enacted budget for the FY 2016 – FY 2017 biennium, it is unlikely that this monthly allocation will be created until legislators and the governor come to an agreement. Therefore, NHFPI plans to publish its own version of the monthly revenue plan for FY 2016, based on the estimates included in the conference committee’s version of the budget, in the hopes of providing a measure against which to judge on-going collections.
[i] The source for the data to make this estimate was the Department of Administrative Services Monthly Revenue Focus reports. Given that Medicaid Enhancement tax collections went into the General Fund between FY 2011 – FY 2013, NHFPI removed it from its calculations to make a more accurate assessment. The same logic could be said for omitting Board and Care revenue, but because it represented such a small dollar amount, its exclusion does not alter the results.
[ii] In the December 2014 Monthly Revenue Focus, it was noted that a one-time holding company transaction was largely responsible for abnormally high growth in real estate transfer tax collections.