MONTGOMERY, Alabama -- State revenue totals released Friday for October through June, the first nine months of the 2011 fiscal year, shouldn't lead to changes in budgeted spending for the Education Trust Fund or General Fund, assistant state finance director Bill Newton said.
"We've got three months to go (in the fiscal year), but based on this report, there's no reason to predict a change," Newton said.
Gov. Robert Bentley on Feb. 28 trimmed 3 percent across the board from this year's budgeted trust fund spending.
The trust fund, the main source of state tax dollars for public schools and colleges, now is budgeted to spend $5.35 billion in this fiscal year.
Bentley on March 31 prorated the General Fund by 15 percent, reducing its budgeted spending for the fiscal year to $1.59 billion. The General Fund is a major source of state money for Medicaid, prisons and other non-education areas of government.
Newton said tax collection numbers released by the state Finance Department were in line with maintaining those proration levels.
For the trust fund, tax collections totaled $3.98 billion in October through June, a gain of 3.6 percent compared to the same period a year earlier.
That growth stands in sharp contrast to steep drops during the recession. The trust fund's tax collections fell $702 million, a drop of 11.8 percent, from the 2008 to 2009 fiscal year. They fell another $23.5 million, 0.4 percent, from fiscal 2009 to last year.
"I definitely think we have turned the corner," said Rep. Jay Love, R-Montgomery, who chairs the Ways and Means-Education Committee of the state House of Representatives.
"Hopefully, the next two or three years, we'll have steady growth," he said. "I think in this current economic environment, that's absolutely a very positive thing."
Revenue outlooks can be treacherous, but some budget watchers use gross tax collections to gauge future trends.
Gross individual income tax collections for the trust fund, before payment of refunds and other deductions, grew 5.9 percent in October through June compared to the same period a year earlier.
Gross corporate income tax collections for the trust fund were down 18.8 percent in October through June compared to the same period a year earlier. Newton said that reduction may be caused in part by businesses deducting losses in previous tax years from this year's income.
Gross sales tax collections for the trust fund grew 3.7 percent in October through June compared to the same period a year earlier. Net collections grew by just 0.9 percent, because of increased payments so far this fiscal year on school bond debt and other deductions from gross tax collections, such as a $19.4 million payment the state made in a lawsuit involving the Public School and College Authority.
"When you're having sales-tax growth and income-tax growth at the individual level, the expectation is that the corporate revenue will follow," Love said.
Newton agreed that recent tax collections indicate an improving state economy. "Our state's economy is showing growth, but it's moderate," he said.
The Finance Department also reported that tax collections and other revenues for the General Fund totaled $1.04 billion in October through June, a jump of 18 percent, compared to the same period a year earlier.
But most of that increase came from two windfalls -- $72 million taken from a reserve created to pay business privilege tax refunds; and $56 million in capital gains from the Alabama Trust Fund, a giant state savings account. The General Fund got no capital gains from the Alabama Trust Fund in the last fiscal year.
Take away those windfalls, and the General Fund grew 3.4 percent in October through June compared to the same period a year earlier