(The Center Square) – Arizona’s fiscal projections looked bright for October.
The Arizona Joint Legislative Budget Committee released October projections on Nov. 20 that revealed $1.31 billion in “general fund collections” during the month, which was an over 26% uptick from the year prior. The report stated that the month “significantly exceeded projections.”
Gains came from across the board, including individual income tax “record levels” of corporate tax revenues.
“The [Individual Income Tax] category saw significant forecast gains in withholding collections, which grew by 6.4% during the month,” the report stated.
“While this is generally in line with recent employment and wage trends, the withholding growth was higher than expected – the enacted forecast projected more modest withholding growth given that October 2024 has one less Monday than October 2023 (Monday is the main withholding tax processing day),” it continued.
Sales tax also had a 5% uptick from last October. Overall, there was a 7.8% increase in “fund revenues” – $245 million higher than the “enacted budget forecast.”
The numbers could signal the expected rebound for the state’s budget in the coming fiscal year, as cuts had to be made in fiscal year 2025. The $1.4 billion budget in June had cuts in different areas, which garnered a mix of bipartisan opposition and support in the legislature before ultimately being signed by Gov. Katie Hobbs, The Center Square reported.
The Grand Canyon State currently has a flat individual income tax rate of 2.5%, which was adopted last year, and a corporate tax rate of 4.9%. When it comes to this years budget priorities, the battle might look different this year since there is not a project shortfall, but tensions at the capitol are expected to continue with Hobbs still at the helm and Republicans growing their majorities in the legislature this election.
