A newly released "early benchmark" of the official state jobs figures shows that payroll jobs declined at an annualized rate of 0.6 percent from September 2022 through March 2023, whereas the official state tally showed growth of 1.8 percent over that period. This amounts to a net decline of about 50k jobs over that period compared to the unbenched tally of +165k jobs.
August PIT withholding came in $367 million (5 percent) above projections included in the 2023-24 Budget Act. For the fiscal year so far, PIT withholding is on track with the Budget Act projections and running about 1 percent lower than the same period last year.
The administration's recent Unemployment Insurance (UI) Trust Fund forecast shows that UI benefit payments will exceed state payroll tax contributions by $1.1 billion in 2023. Historically, benefit payments have only exceeded contributions during major economic downturns. For the first time, the fund is expected to be out of balance during a period of job growth.
The May Revision anticipates a funding shortfall for programs supported by cannabis tax revenues. Our new revenue estimates are slightly higher, yielding a slightly smaller funding shortfall. Specifically, our estimate for 2022-23 cannabis retail excise tax revenue is $509 million. This is $24 million above the administration’s May Revision estimate but $133 million below the January Governor’s Budget estimate.
Based on the most recent revenue and economic data, we currently estimate that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion in 2022-23.