Yesterday’s post (found here) mentioned Grand Forks retail and the fact that sales were behind last year’s level. As a recap, the accumulated total of monthly collections in 2016, when compared to the same month in 2015, were all lower, and in some cases by significant amounts. Collections from a few specific months were ahead of the same month the year before, but the accumulated total never got higher than 2015.
Location matters. A lot. The more I read and study about the North Dakota economy the clearer that becomes. As I go through this I am looking more and more at the various locations for economic activity in the state, as the following map demonstrates.
Sales tax is by far the largest consistent component in revenue generation for the state of North Dakota, but it is by no means the only one. With that in mind I am generating similar information for other revenue streams. Today it will be corporate income taxes. This one is a bit tricky to look at because there are instances of missing values. These are not missing in the sense that somebody is hiding something; these are missing values in the sense that the report provides nothing for the forecast value for corporate income tax in July, August, and September in that particular publication by the state OMB.
I did some looking at sales tax revenues. I went back to July of 2009 and stopped the graph at December 2015. I will have a separate post looking at the circumstances after that date with the revision of the forecast and what happened then. These data come from the state OMB Rev-E-News publication released monthly.
This is going to get a bit more technical than many of my other posts. However, I am a big believer that there is no reason to shy away from complexity, particularly when avoiding it sacrifices accuracy. So we are going to discuss forecast performance for sales tax in North Dakota. There are many different ways to evaluate forecasts and the one I will use here is called a tracking signal.