Collection Of Taxes Ahead Of Forecasts

A rush to cover 1997 tax liability pushed state tax collections well above the Batt administration’s upwardly revised projection in December, giving the economy a cushion heading into the second half of the government’s spending year.

The Division of Financial Management, in its latest update on the economy, said tax receipts through December ran $9.3 million over the administration forecast that was beefed up by another $3.5 million last month.

“This provides a strong start to the second half of the fiscal year, and a welcome buffer against the possible impact of recent financial turmoil in Asian economies,” chief economist Michael Ferguson said.

The surge in voluntary individual income tax payments at year’s end was more than enough to offset paycheck withholding falling more than $1 million short of the monthly target. That lag in a key indicator of the economy’s underlying job strength, followed November’s strongest showing in withholding collections in nearly three years.