Presentation Outline Current Revenue Trends Discussion of Selected - - PDF document

▶
presentation outline
SMART_READER_LITE
LIVE PREVIEW

Presentation Outline Current Revenue Trends Discussion of Selected - - PDF document

Nov 11, 2023 344 likes •478 views

General Fund Revenue Update 2013 Biennium Terry W. Johnson Principal Fiscal Analyst Legislative Fiscal Division (LFD ) February 17, 2012 A report to the Revenue and Transportation Interim Committee 1 Presentation Outline Current Revenue

slide-1
SLIDE 1

1

General Fund Revenue Update

2013 Biennium

Terry W. Johnson Principal Fiscal Analyst Legislative Fiscal Division (LFD)

1

February 17, 2012 A report to the

Revenue and Transportation Interim Committee

Presentation Outline

  • Current Revenue Trends
  • Discussion of Selected Tax Sources
  • 2013 Biennium Ending Fund Balance
  • Summary

2

slide-2
SLIDE 2

2

Fiscal 2012 To Date Summary General Fund Revenue Comparison

  • Through January FY 2011

$ 1,009.9 M

  • Through January FY 2012

$ 1,080.7 M

  • Current Change and Rate (7 months) $ 70.8 M 7.01%
  • HJ 2* Growth and Rate (Full Year) $

3.1 M 0.17%

3 * Legislature’s Revenue Estimating Resolution

Individual Income Tax Snapshot

Individual Income Tax Statistics Through January- FY 2011 vs FY 2012

5.5% 8.0% 17.1% 5.0% 10.0% 15.0% 20.0%

Through January FY 2011 vs FY 2012

4

  • 6.0%
  • 10.0%
  • 5.0%

0.0% Withholding Estimated Refunds Audits

slide-3
SLIDE 3

3

What Are Withholding Tax Trends?

Individual Income Tax Withholding Cumulative Percent Change By Month FY 2011 to FY 2012

3.1% 3.7% 4.3% 6.9% 2 9% 5.2% 5.5% 4.0% 5.0% 6.0% 7.0% 8.0%

Cumulative Percent Change By Month - FY 2011 to FY 2012

5

2.9% 0.0% 1.0% 2.0% 3.0% Jul. Aug. Sep. Oct. Nov. Dec Jan

What Are Estimated Payment Trends?

Individual Income Tax Estimated Payments By Fiscal Y ear

$80 $100 $120 $140 $160 $180 $200

Estimated Payments By Fiscal Y ear Based on Data Through January (Millions)

6 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Amount $147.299 $159.248 $177.403 $114.805 $109.499 $118.141 $0 $20 $40 $60 $

slide-4
SLIDE 4

4

Individual Income Tax

1/31/2011 1/31/2012 Percent Revenue Code & Description Fiscal 2011 Fiscal 2012 Difference Change 510101 Withholding Tax 379,345,769.94 400,220,098.38 20,874,328.44 5.50% 510482 Mineral Royalty WH Tax 7,420,131.40 7,454,853.09 34,721.69 0.47% 510111 Fiduciary Estimated Income Tax 2,369,230.51 2,686,279.44 317,048.93 13.38% 510102 Estimated Tax 109,499,336.24 118,141,387.39 8,642,051.15 7.89% 510103 Current Year I/T 6,098,814.29 14,233,168.63 8,134,354.34 133.38% 510105 Income Tax- Audit Collections 14 416 955 00 13 548 019 00 (868 936 00)

  • 6 03%

Individual Income Tax Comparison 7 510105 Income Tax Audit Collections 14,416,955.00 13,548,019.00 (868,936.00) 6.03% 510106 Income Tax Refunds 54,828,916.29 64,208,269.46 9,379,353.17 17.11% Income Tax Refunds Adjustment 0.00 0.00 0.00 0.00% Totals $573,979,153.67 $620,492,075.39 $46,512,921.72 8.10% Percent of Actual/Estimated 70.33% 76.67%

Underlying Corporate Tax Growth

Corporation License Tax Collections Before Audits Basedon Data Through January (In Millions)

$20 0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 Millions

Based on Data Through January (In Millions)

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Taxes $45.7 $43.7 $31.4 $19.0 $30.6 $37.1 $65.1 $84.6 $60.0 $79.5 $22.4 $45.1 $56.4 % Change

  • 4.2%
  • 28.2% -39.5%

61.2% 21.1% 75.5% 30.0%

  • 29.1%

32.5%

  • 71.8% 100.9%

25.2%

  • $10.0

$0.0 $10.0 $20.0

slide-5
SLIDE 5

5

What are Estimated Payment Trends ?

Corporation License Tax E ti t d P t B Fi l Y

$40 $50 $60 $70 $80 $90

Estimated Payments By Fiscal Year Based on Data Through January (Millions)

9 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Amount $76.368 $66.503 $71.731 $36.148 $50.230 $57.462 $0 $10 $20 $30

What are Current Year Payment Trends ?

Corporation License Tax

$10 $15 $20 $25

p Current Year Payments By Fiscal Year Based on Data Through January (Millions)

10 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Amount $12.969 $10.311 $19.543 $5.803 $6.704 $6.750 $0 $5 $10

slide-6
SLIDE 6

6

Record Audit Activity - So Far

C ti Li T A dit

$10.0 $12.0 $14.0 $16.0 $18.0 $20.0 Millions

Corporation License Tax Audits Based on Data Through January (In Millions) 11

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Audits $1.2 $4.5 $3.7 $2.1 $3.1 $8.9 $11.6 $14.2 $7.6 $7.3 $18.4

$0.0 $2.0 $4.0 $6.0 $8.0 M

DOR Audit Processing

$0.0 $5.0 $10.0 $15.0

Millions

Corporation License Tax - Current Year Payments vs Audits Month over Month Change - FY 2012 (In Millions)

12 02 Aug. 03 Sep. 04 Oct. 05 Nov. 06 Dec. 07 Jan. Current Year 3.012 1.906 0.252 1.081 7.830 (8.605) Audits 0.822 1.184 0.837 1.562 3.138 11.107

  • $10.0
  • $5.0

$

M

Current Year Audits

slide-7
SLIDE 7

7

Corporation License Tax

1/31/2011 1/31/2012 Percent Revenue Code & Description Fiscal 2011 Fiscal 2012 Difference Change 510501 Corporation Tax 6,703,850.37 6,750,278.49 46,428.12 0.69% 510505 Corporation Tax Estimated Paym 50,230,089.04 57,462,247.11 7,232,158.07 14.40% 510502 Corporation Tax Refunds (11,849,832.41) (7,988,001.22) 3,861,831.19

  • 32.59%

510503 Corporation Tax-Audit Collect. 7,269,186.00 18,650,153.00 11,380,967.00 156.56% Corporation TaxRefunds Adjustment 0 00 0 00 0 00 0 00% Corporation License Tax Comparison 13 Corporation Tax Refunds Adjustment 0.00 0.00 0.00 0.00% Totals $52,353,293.00 $74,874,677.38 $22,521,384.38 43.02% Percent of Actual/Estimated 43.98% 65.06%

Vehicle Fees/Taxes Are Flat

General Fund Vehicle Fees/Taxes Through January FY 2011 vs FY 2012 (In Millions)

$40 $60 $80 $100 $120

Through January FY 2011 vs FY 2012 (In Millions)

14

  • Act. 2011

HJ2 2012

  • Jan. FY 2011
  • Jan. FY 2012

Amount $100.577 $106.716 $50.074 $50.283 Percent 100.0% 100.0% 49.8% 47.1% $0 $20

slide-8
SLIDE 8

8

The Oil Slide May be Ending

10 0

Montana Oil Production By Quarter

3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Million Barrels Total Production Horizontal Production

15

0.0 1.0 2.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2003 2004 2005 2006 2007 2008 2009 2010 2011

Oil Prices Keep Total Value Increasing

Montana Oil Gross Value By Quarter

$300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 Millions

16

$0.0 $100.0 $200.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2003 2004 2005 2006 2007 2008 2009 2010 2011

slide-9
SLIDE 9

9

Oil Rig Counts Show Uptick

Oil Rig Counts By Month Montana versus North Dakota

60 80 100 120 140 160 180 200 Number of Rigs

Montana versus North Dakota

17 20 40 60 N Montana North Dakota

Does Price Impact Lease Payments ?

Montana Oil and Gas Lease Payments Versus WTI Price per Barrel

$40 $60 $80 $100 $120 $140 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000

Ve sus W ce pe e 18

$0 $20 $0 $2,000,000 Dec. 2007 Mar. 2008 Jun. 2008 Sep. 2008 Dec. 2008 Mar. 2009 Jun. 2009 Sep. 2009 Dec. 2009 Mar. 2010 Jun. 2010 Sep. 2010 Dec. 2010 Mar. 2011 Jun. 2011 Sep. 2011 Dec. 2011 Lease Sale Dollars (Left axis) WIT Price per Barrel(right axis)

slide-10
SLIDE 10

10

Insurance Taxes Are Flat

General Fund Insurance Tax

$20 $30 $40 $50 $60 $70

Through January FY 2011 vs FY 2012 (In Millions)

19

  • Act. 2011

HJ2 2012

  • Jan. FY 2011
  • Jan. FY 2012

Amount $57.964 $57.372 $24.129 $24.170 Percent 100.0% 100.0% 41.6% 42.1% $0 $10 $20

Interest Rates Continue at All Time Lows

Short-Term Investment Pool Rates

2.0 3.0 4.0 5.0 6.0

Short Term Investment Pool Rates

20

0.0 1.0 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12

slide-11
SLIDE 11

11

Impact of Low Interest Rates

Treasury Cash Account Interest Earnings

$15 $20 $25 $30 $35 $40

By Fiscal Y ear (In Millions)

21 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Amount $10.047 $18.631 $33.951 $30.783 $15.507 $2.692 $2.519 $0 $5 $10 $15

2013 Biennium General FundRevenue Estimates

Changes Discussed in December

FY 2012 % of Adjustment Adjustment Adjustment Tax Source HJ2 Estimate Total FY 2012 FY 2013 2013 Biennium

1 Individual Income Tax

$809.322 45.3% $56.861 $60.411 $117.272

2 Property Tax

237.188 13.3% No Chg. No Chg. No Chg.

3 Corporation License Tax

115.086 6.5% 15.079 16.777 31.856

4 Vehicle Fee/Tax

106.716 6.0% (7.775) (7.807) (15.582) 2013 Biennium General Fund Revenue Estimates Anticipated Revenue Adjustments - In Millions

22 5 Oil & Gas Production Tax

102.996 5.8% 5.329 19.917 25.245

6 Insurance Tax

57.372 3.2% 1.878 1.982 3.860 Remaining 356.942 20.0% (9.495) (15.327) (24.822) Totals $1,785.622 $61.877 $75.953 $137.829 Interest & Income (Oil & Gas Bonus Payments) $17.4 $6.4 $23.800

slide-12
SLIDE 12

12

2011 2013

Legislative Budget - General Fund Outlook

Figures in Millions

How Revenue Adjustments Impact Outlook

Biennium Biennium $396.334 $343.762 Revenue 3,409.703 3,638.761

  • 137.829

$3,806.037 $4,120.353 Disbursements 3,273.726 3,249.690 340.721 379.702 Total Funds Available Beginning Fund Balance HJ2 Revenue Estimate Anticipated Adjustments General Appropriations - HB2 Statutory Appropriations 23 135.516 30.020 Other Appropriations

  • 4.206

Supplementals

  • 29.614
  • 12.478

(285.936) (12.069) $3,464.027 $3,693.641 1.752

  • Ending Fund Balance

$343.762 $426.712 Fund Balance Adjustments y pp p Transfers Feed Bill Reversions Total Disbursements

  • Revenue Improvement - Stable

Summary – Significant Issues

p

  • Individual Income Tax
  • Withholding Growth
  • Estimated Payments
  • Corporation License Tax
  • Estimated Payments
  • Audit Revenues
  • Oil & Gas Revenue

24

  • Oil & Gas Revenue
  • Bakken Formation Influence
  • Lease Payments
  • Reduced Supplemental Approps.
  • General Fund Balance