More people bought tattoos and tacky shirts in Sturgis last month, but Rally sales didn’t lift the rest of the state. According to the Legislative Research Council’s August revenue report, August sales tax receipts were down 1.3% from last year and 6.3% below the Legislature’s budget target.
We collected $5.6 million less sales tax than the Legislature figured we needed. Luckily, we collected $4.0 million more in sales during our better-than-expected July, which leaves us mixed on sales tax for the first two months of the year: up 2.2% from last year but 0.90% below this year’s target.
Contractor’s excise tax was also off target. Over the last two months construction has underperformed last year’s all-time high and this year’s budget assumptions, leaving us with $2.2 million less in contractor’s excise tax than the Legislature budgeted for.
State alcohol taxes are a minor portion of the budget, less than half a million dollars a month, but it’s notable that wholesale alcohol collections dropped 3.0% and beverage tax collections dropped 9.1% in August compared to last year. The rest of us apparently watered down the Rally surge.
Two months in, total general fund receipts are down 1.58%—$4.6 million—below our budget target. If we stay on this drooping tax curve, the Legislature will have to plug a $28-million hole in the state budget.