New fiscal year starting with $400 million more than expected

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The state closed out the 2024 fiscal year with nearly $600 million more revenue than budget analysts predicted in January — and more than $400 million than lawmakers expected when they approved a state budget in mid-June.

Nearly half of that gain came in June, the final month of the fiscal year, legislative staffers reported on Tuesday. Revenue collections for the month were $248 million above the forecast, the Joint Legislative Budget Committee noted in a monthly fiscal report .

The strong close to the fiscal year brought the total revenue results to $563 million more than analysts predicted in January, when they did a mid-fiscal year forecast of the remaining six months of the budget.

That forecast plays a major role in the budget that lawmakers create for the upcoming fiscal year. In this case, it means that fiscal year 2024 will end with $412 million more revenue than lawmakers budgeted for in the spending plan that was approved in mid-June after months of negotiations.

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Exactly what that means for the budget’s bottom line is unclear, however, as final state spending for June hasn’t been tallied and won’t be available until next month. However, the JLBC analysts noted that any surplus to end the year is beneficial since the enacted fiscal year 2025 budget’s three-year plan anticipates a slim $8 million surplus in 2027.

The largest source of the better-than-forecast revenue was Medicaid refunds, which totaled $160 million due to spending on developmental disabilities being less than projected and managed care program profits being higher than expected.

In main tax categories, the gains were driven by individual income taxes, which beat the projection by $156 million because fewer tax refunds were issued. Another $92 million came from corporate income taxes, which decreased less than expected over the prior year.

Meanwhile, insurance taxes were $51 million more than anticipated and sales taxes beat projections by $49 million.

And proceeds from unclaimed property reached a record $211 million, helping drive a $41 million gain in a miscellaneous revenue category.

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