Legislative Budget Office of the Legislative Service Commission
Jean Botomogno, Principal Economist
FY 2021 GRF sources through November of $17.00 billion were $112.2 million (0.7%)
above the estimate released by OBM in September 2020. GRF sources consist of state-source
receipts, which include tax revenue, nontax revenue, and transfers in, and federal grants (which
was the only GRF category with a negative variance). GRF tax sources, nontax revenue, and
transfers in were above projections by $393.6 million (3.8%), $17.2 million (17.5%), and
1.9 million (2.4%), respectively. Those positive variances were partially offset by a shortfall of
300.5 million (4.7%) for federal grants. Revenue for this GRF category is related to spending for
Medicaid and other human services programs; GRF Medicaid expenditures were $411.9 million
below estimate through November. Tables 1 and 2 show GRF sources for the month of November
and for FY 2021 through November, respectively.
Five months into FY 2021, GRF tax sources have been unexpectedly robust. The sales and
use tax, the PIT, and the cigarette tax were $306.9 million, $69.9 million, and $26.0 million above
their respective estimates. However, the commercial activity tax (CAT) had a year-to-date (YTD)
shortfall of $21.4 million, primarily due to poor tax payments in August tied to COVID-19-related
measures in the spring quarter. Regarding the other taxes, the foreign insurance tax, the
financial institutions tax (FIT), the alcoholic beverage tax, and the liquor gallonage tax were above
their respective YTD revenue targets by $14.8 million, $8.5 million, $3.6 million, and $3.3 million.
On the other hand, the kilowatt-hour tax, the natural gas consumption tax, the public utility tax,
and the petroleum activity tax experienced negative variances of $12.6 million, $3.7 million,
1.9 million, and $1.0 million, respectively.
November GRF sources were ahead of expectations by $135.9 million due to positive
variances of $91.0 million (7.2%) for federal grants and $46.4 million (2.3%) for GRF taxes. Nontax
revenue fell short of estimate by $1.5 million (48.9%); no transfers in occurred or were expected
during the month. The sales and use tax, the PIT, and the cigarette tax were above their
anticipated revenue levels by $39.0 million, $2.1 million, and $3.3 million, respectively, but the
second quarterly payment by CAT taxpayers resulted in a deficit of $6.3 million for the GRF.
Though negative, this variance was much smaller than the $30.4 million CAT shortfall of August
November; instead, this tax had receipts of $1.0 million, for a monthly positive variance of
020. Foreign insurance taxpayers were expected to receive net refunds of $9.7 million in
10.7 million. In addition, the FIT had a positive variance of $4.0 million. Partially offsetting the
1 This report compares actual monthly and year-to-date (YTD) GRF revenue sources to OBM’s
estimates. If actual receipts were higher than estimate, that GRF source is deemed to have a positive
variance. Alternatively, a GRF source is deemed to have a negative variance if actual receipts were lower
2 To slow the pandemic outbreak, the Governor issued an emergency declaration on March 9, 2020,
and various public health orders followed, including a stay-at-home requirement and some business
closures. Those measures reduced economic activity and taxable gross receipts in the spring quarter, which
was the basis for the tax paid by quarterly CAT taxpayers in August 2020.
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