WASHINGTON -- This year's federal budget deficit is likely to be larger than expected, analysts said Friday after the government reported that the April budget surplus was smaller than previous ones.
Economists now expect the budget deficit for fiscal 1993, which ends Sept. 30, to be very close to last year's record deficit of $290 billion. The revised estimate is $10 billion to $15 billion more than previously forecast.
The government ran an $8.1 billion surplus last month, down 44.5% from the April 1992 surplus of $14.6 billion, the Treasury Department reported. The government typically runs a budget surplus in April because final tax payments are made then for the previous calendar year.
"The smaller April deficit has caused us to revise up our deficit forecast to last year's level of $290 billion," said Louis Crandall, chief economist of R.H. Wrightson & Associates Inc. "But we're still on track to fall well below the administration's estimate of a $322 billion deficit."
Previously, Crandall expected the yearend 1993 deficit to fall in the $250 billion to $275 billion range.
"Most people were forced to revise up their yearend estimates," said Susan Hering, an economist of Salomon Brothers Inc.
Anticipation of a disappointing April surplus prompted Hering to revise up her 1993 deficit forecast to around $290 billion from a previous estimate of $280 billion.
But she said there is still time in fiscal 1993 for the budget picture to improve slightly.
April's smaller surplus resulted in part from lower personal income tax receipts. Individual receipts totaled $56.1 billion in April, down 17.5% from $68 billion in the previous April, the department reported.
Several special factors affected the April surplus, analysts said.
Most notably, the government changed the tax laws to force high-income earners to pay more of their taxes before the end of the year, economists said.
"The main cause of the April disappointment was the fact that the Treasury had gotten its hands on a big chunk of the taxes before April arrived," Crandall said.
Analysts said that as the year progressed, they thought the higher tax receipts resulted primarily from a stronger economy and not from people paying their taxes earlier. "It turns out that January was April this year," Hering said.
Other factors were expected to increase the surplus in April, analysts said. Last spring, President Bush reduced income tax withholdings so consumers would have more disposable income. This implied that the government would have to pay out smaller refunds in April.
However, economists said that many people may have opted to have extra money withheld from their pay so they would end up with the same size refund.
"This latter observation would fit with the view that many taxpayers use tax refunds as forced savings," Kathleen Stephansen, an economist with Donaldson, Lufkin & Jenrette Securities Corp., said in her firm's market commentary. Government outlays in April totaled $124 billion, which is up only slightly from $123.7 billion in the previous April, the department reported.
Government receipts totaled $132.1 billion in April, down from $138.4 billion a year ago, the department said.
Hering said that government spending in April was somewhat lower than she expected, but not by enough for her to change her yearend deficit forecast.