Providence, R.I. -- The Rhode Island Department of Revenue (DOR) has released its FY 2020 Revenue Assessment Report for April 2020. The Revenue Assessment Report, which is issued on a monthly basis, compares the adjusted general revenues by revenue source on a fiscal year-to-date and monthly basis to expected general revenues by revenue source. Expected general revenues are estimated by the DOR's Office of Revenue Analysis from the revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC). The methodology underlying the Office of Revenue Analysis' estimates is contained in the report. The April 2020 Revenue Assessment Report is the first to reflect the impact of the COVID-19 pandemic on state revenues, fully capturing March 2020 impacts and partially incorporating April 2020 effects.
The revised FY 2020 estimate for total general revenues was effectively unchanged from the enacted budget, however, several components of total general revenues experienced significant revisions at the November 2019 REC. Among these were estate and transfer tax revenues, increased by $25.4 million; personal income tax revenues, $15.0 million higher; sales and use tax revenues, revised up by $11.7 million; insurance company gross premiums tax revenues, increased by $6.8 million; and cigarette and other tobacco products excise tax revenues revised up by $2.3 million. Substantive downward revisions were made to the lottery transfer, $(35.7 million); business corporation tax, $(20.3 million); departmental receipts revenues, $(5.0 million); health care provider assessment revenues, $(1.7 million); and motor vehicle license update fees and alcohol excise tax revenues, $(1.2 million) each.
April Year-To-Date Performance. On a fiscal year-to-date basis, the April 2020 report shows that adjusted total general revenues lag expected total general revenues, based on the revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC), with adjusted total general revenues $139.9 million less than expected total general revenues, a variance of 4.9%. This shortfall was driven by personal income and other tax revenues, which were $166.2 million less than the revised estimate, a variance of 13.1%; other general revenue sources, which were $14.4 million below expectations, a variance of 4.9%; and excise tax revenues, which were $4.3 million behind the estimate, a variance of 0.4%. These negative contributions to total general revenues were offset by overages in general business tax revenues of $43.9 million, a difference of 12.4% and departmental receipts of $1.1 million, a variance of 0.6%.
Regarding April year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: • Fiscal year-to-date adjusted total general revenues through April fell below expectations by $139.9 million, or 4.3%, as the economic impact of the COVID-19 pandemic began to be felt in Rhode Island; • Adjusted personal income tax revenues through April were $162.4 million below expectations, a variance of 13.6%, due largely to the delay of the personal income tax payments and filing deadline from April 15, 2020 to July 15, 2020. Personal income tax estimated and final payments revenues were a combined $178.1 million short of the estimate or 38.5%, withholding tax revenues were $2.5 million behind expectations or 0.2% and refunds and adjustments revenues were $18.2 million less than the estimate, a variance of 5.6%. • Adjusted fiscal year-to-date sales and use tax revenues, which largely reflect March sales activity, were below expected sales and use tax revenues for the period at $5.1 million, a variance of 0.5%; • Year-to-date FY 2020 adjusted business corporation tax revenues were $26.7 million above the fiscal year-to-date through April estimate, a variance of 21.2% with $46.5 million in income tax payments received from pass-through entities made on behalf of their shareholders; • FY 2020 year-to-date through April financial institutions tax revenues were $19.6 million more than expected due to the redemption of $10.0 million in historic structures tax credits and $15.0 million in estimated payment(s) received year-to-date; • Adjusted fiscal year-to-date insurance company gross premiums tax revenues were $3.8 million above expectations with both health insurance and non-health insurance components exceeding expectations by $1.3 million and $2.3 million respectively; • The fiscal year-to-date through April lottery transfer, which reflects gaming activity through March, was $14.4 million, or 5.2% below the estimate with the transfer of income from the video lottery terminals and table games operated at Twin River and Tiverton a combined $15.0 million less than expected, a variance of 6.5%. The Twin River Casino Hotel and the Tiverton Casino Hotel were closed indefinitely on March 14, 2020. • Adjusted public utilities gross earnings tax, estate and transfer tax and health care provider assessment revenues were a combined $10.4 million behind their estimates through April, down 6.0%.
April Monthly Performance. For the month of April, the report indicates that adjusted total general revenues were $237.9 million below expectations for the month or a variance of 46.6%. The largest drivers of this shortfall were personal income tax revenues, which were $155.4million less than estimated, or 66.9%; general business tax revenues, which were $45.8 million behind projections or 43.2%, excise tax revenues that lagged expectations by $16.3 million, or 15.0%; the lottery transfer, which was $20.3 million below the estimate, and departmental receipts revenues, which trailed the estimate by 8.0% or $(1.9 million). Only other tax revenues exceeded their expected amounts, by a total of $1.8 million, or 60.3%.
Regarding performance for the month of April, Director of Revenue Mark A. Furcolo made the following observations: • April adjusted total general revenues were below expectations by $237.9 million, a variance of 46.6%, as the first economic impacts from the COVID-19 pandemic took their toll on state revenues; • Adjusted April personal income tax revenues were 66.9% less than estimated, with personal income tax estimated and final payments negatively impacted by the change in their due dates from April 15, 2020 to July 15, 2020 to the tune of $(184.3 million) or 84.9% while personal income tax withholding revenues were $7.4 million below expected, or 7.2% as the state's unemployment rate ticked up and refunds and adjustments were less than expected by $36.2 million, or 41.7% • Adjusted monthly sales and use tax revenues were $14.9 million less than expected in April, which reflects March sales activity, or 15.5% as the impacts of the halt to dine-in service at restaurants and bars and "stay-at-home" provisions for residents took hold; • April business corporation tax revenues were $23.1 million below the monthly estimate, a variance of 69.9%, public utilities gross earnings tax revenues were $4.1 million less than expected for the month, or 16.3%, financial institutions tax revenues trailed the estimate for April by $8.1 million or 68.8%, and insurance company gross premiums tax revenues lagged monthly expectations by $10.2 million or 31.9%. Each of these revenue streams were also subject to the shift in the due date for payments and returns from April 15, 2020 to July 15, 2020; • Adjusted monthly cigarette and other tobacco products excise tax revenues were $1.1 million below expectations for April, or 10.7%, while the lottery transfer was $20.3 million less than the monthly estimate as the transfer of income from video lottery terminals and table games were a combined $18.9 million behind the estimate or 65.0% due to the closure of the Twin River Casino Hotel and the Tiverton Casino Hotel on March 14, 2020. • Adjusted estate and transfer tax revenues for April were $1.9 million above the revised estimate for the month, or 93.2%.
The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2020, under the State Reports tab.
Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at paul.grimaldi@revenue.ri.gov or by phone at (401) 574-8766.