Comments on: What The Blues Won’t Tell You About State Revenues http://www.redhampshire.com/what-the-blues-wont-tell-you-about-state-revenues/ We need a conversation. Let's get the party started. Thu, 09 Sep 2010 22:00:55 -0600 http://wordpress.org/?v=2.8 hourly 1 By: steve vaillancourt http://www.redhampshire.com/what-the-blues-wont-tell-you-about-state-revenues/comment-page-1/#comment-3189 steve vaillancourt Thu, 04 Feb 2010 17:35:34 +0000 http://www.redhampshire.com/?p=6519#comment-3189 These numbers are limited to revenues for the current fiscal year; we're seven monhts into the year. The $110 million in JUA money is gone. The governor was going to use part of it to balance last year's account; instead they drained the rainy day fund to balance the books, to the point we have less than $10 million left in the rainy day fund. To the extent that more of the JUA money was going to be used to balance this year's budget, that's more money we will not have, but it's not part of this revenue stream. But you are correct; that $22.5 million we were counting on will not be there, so you could in fact add it to the shortfall I'm projecting here. The LLC is a more complicated thing to answer since the language of that bill should have been used when they made projections on the interest and dividends tax which is already underperforming by 20 percent. Any changes which would produce less revenue would naturally produce even more shortages in this line, a very good reason to believe they (Dems in control) won't change this bill--or if they change it, it'll be so they can take in more money! These projections are based on them getting all they planned. If they lose $7.5 million, you can add that to the shortfall, but I wouldn't think the courts will rule against the state on this one--not after the JUA ruling in which two justices referred to legislative discretion. I'm guessing the justices are gun shy! These numbers are limited to revenues for the current fiscal year; we’re seven monhts into the year. The $110 million in JUA money is gone. The governor was going to use part of it to balance last year’s account; instead they drained the rainy day fund to balance the books, to the point we have less than $10 million left in the rainy day fund.

To the extent that more of the JUA money was going to be used to balance this year’s budget, that’s more money we will not have, but it’s not part of this revenue stream. But you are correct; that $22.5 million we were counting on will not be there, so you could in fact add it to the shortfall I’m projecting here.

The LLC is a more complicated thing to answer since the language of that bill should have been used when they made projections on the interest and dividends tax which is already underperforming by 20 percent. Any changes which would produce less revenue would naturally produce even more shortages in this line, a very good reason to believe they (Dems in control) won’t change this bill–or if they change it, it’ll be so they can take in more money! These projections are based on them getting all they planned. If they lose $7.5 million, you can add that to the shortfall, but I wouldn’t think the courts will rule against the state on this one–not after the JUA ruling in which two justices referred to legislative discretion. I’m guessing the justices are gun shy!

]]> By: Greg Moore http://www.redhampshire.com/what-the-blues-wont-tell-you-about-state-revenues/comment-page-1/#comment-3188 Greg Moore Thu, 04 Feb 2010 13:32:46 +0000 http://www.redhampshire.com/?p=6519#comment-3188 Steve, how do the LLC tax and JUA moneys figure into these numbers? Would the JUA represent an additional $22.5 million, on top of the $77 or $92 million? Is the Interest and Dividends tax figure low because the state hasn't established administrative rules for LLCs and can't collect taxes yet? In essence, we know that the JUA raid represents $22.5 million in revenue this fiscal year. We are unlikely to see this materialize. We also know the LLC tax represents $15 million in revenue for this fiscal year. This might drop to $7.5 million if the courts rule that the tax can only start on July 1, not January 1 of last year. (Frankly, I have no idea how DRA would operationalize this, since they just want to go off the full year tax return. They would have to audit every LLC to see when disbursements were made during the year, a process that might cost more than the tax would bring in.) How do these figures bake into the other deficit numbers? Steve, how do the LLC tax and JUA moneys figure into these numbers? Would the JUA represent an additional $22.5 million, on top of the $77 or $92 million? Is the Interest and Dividends tax figure low because the state hasn’t established administrative rules for LLCs and can’t collect taxes yet?

In essence, we know that the JUA raid represents $22.5 million in revenue this fiscal year. We are unlikely to see this materialize. We also know the LLC tax represents $15 million in revenue for this fiscal year. This might drop to $7.5 million if the courts rule that the tax can only start on July 1, not January 1 of last year. (Frankly, I have no idea how DRA would operationalize this, since they just want to go off the full year tax return. They would have to audit every LLC to see when disbursements were made during the year, a process that might cost more than the tax would bring in.) How do these figures bake into the other deficit numbers?

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