Tax day is almost here, a dreaded deadline for individuals and a nail-biting period for states anxious to know whether they’ll collect enough money to fund their budgets. So important is this period for states that California has an online tracker, updated daily, to tabulate tax receipts as they roll in. California is highly dependent on income taxes, a volatile source. So far, the state has collected 2.2 percent more than Governor Jerry Brown’s budget had assumed.

Josh Lehner, a senior economist for the state of Oregon, says that by late March he starts fielding lots of queries from government officials about whether the state is hitting its projected numbers. He urges caution. Typically, early on in tax season the state processes a lot of tax returns but collects little revenue. That’s because people who file taxes early tend to be those expecting refunds. Below is a chart Lehner shared with me that shows how much the state returns in refunds. Note the big jump in early February.

Courtesy: Oregon Office of Economic Analysis

People who owe additional taxes often file right at the deadline—if not later with an extension:

Courtesy: Oregon Office of Economic Analysis

In other words, people aren’t stupid. The average refund in Oregon is $400. Those getting money back think, “Why not get it as soon as you can?” Lehner says. But for people who still owe taxes, “It’s like, “Why am I going to send off that $500 check early?’”

There’s more to it, though. “A bigger part is that people who get refunds have very simple returns,” says Lehner. “They’re wage earners.” It’s easier for them to get their taxes done early and send them in. Under Oregon’s somewhat progressive income tax system, those who owe additional taxes in April tend to be wealthier people with complicated finances, which means they must wait for tax documents to arrive from the various financial institutions that play parts in their portfolios. “Some of the statements that come from your mutual funds and partnerships are coming later and later in the year,” Lehner says. Because the federal tax system is even more progressive than Oregon’s, Lehner says this pattern tends to hold nationally.

Oregon collects 85 percent to 90 percent of its general revenue during tax season, Lehner says, so understanding these dynamics is key to accurately forecasting what resources the state will have. It also helps anticipate spikes in household spending when people get their refunds. People tend to treat refunds as discretionary income, Lehner says: “Should I go on a night on the town with friends?” or—being Oregon—“Buy a kayak?”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE