ALBANY — State tax collections soared past projections in the third quarter of 2022, according to a new report from State Comptroller Thomas DiNapoli.
State tax receipts totaled $79.8 billion through the third quarter of State Fiscal Year 2022-23, exceeding the Division of the Budget office’s mid-year projections by nearly $7.7 billion.
In the December state cash report released by DiNapoli, personal income tax receipts totaled $42.1 billion, $8.1 billion above the state’s projections through the end of 2022.
Personal income tax receipts were $6.9 billion lower than the same period in last year, as there were two fewer collection days from the prior year as well as higher tax refunds and property tax relief.
“Tax collections continued to exceed projections through December,” DiNapoli noted in a statement. “However, concerns of an economic downturn and a cloudy revenue picture continue to create uncertainty. These conditions reinforce the importance of increasing rainy day reserve funds on or ahead of the schedule proposed in the Financial Plan.”
Robert Purtell, Chairman of the Montgomery County Legislature and a real estate broker with Century 21 Purtell Realty, noted that the local housing market continues to remain strong, with families still interested in establishing roots in the state.
“I think there’s a real appreciation for the quality of life that we have,” Purtell said on Thursday. “It’s a simpler life with less amenities than other communities. It’s just a better quality of life than I’ve seen in larger metropolitan areas.”
Purtell said that while the real estate market is traditionally slower in January and February, housing inventory was consistently low in the region in 2022.
“It was a strong year,” he said. “We didn’t see reductions in property values and sales were consistent.”
Year-to-date consumption and use tax collections totaled $15.5 billion, according to the comptroller’s report, including $14.3 billion from sales and use taxes, which were 4.6% or $679.5 million higher than the same period last year.
Tom O’Connor of the Capital Region Chamber of Commerce said that while the report contained positive news, the potential of a recession in the first or second quarter of 2023 is a possibility pending action from the Federal Reserve.
“You’re seeing sales tax receipts trending upward from the previous year,” O’Connor said of the state report on Thursday. “And I think with the state tax receipt projection of $7.7 billion, that’s positive. But I think when you look at what the comptroller [DiNapoli] is saying both in terms of sales tax receipts and general state revenue collection, there’s always a caveat. You have to look at economic factors driving these receipts and what will happen going forward.”
O’Connor said he heard encouraging feedback from the chamber’s members regarding the holiday shopping season in the last two months of 2022.
“Their focus was on the holiday season and now it’s back to trying to fill open positions,” he explained. “There’s still a labor shortage and it’s very difficult for retailers and restaurants to staff up.”