"We are expecting for the year as a whole to be positive for the first time in three years," Luebbering said.

The 0.8 percent increase in revenue collections for August was the first upward turn in the past couple of years. The growth was prompted by an increase in individual income tax collections, Luebbering said.

"When the individual income tax goes up or down, it pretty much drives what happens with our revenue collections," Luebbering said. "Our employment numbers have been up for several months, so that's the good news."

The 3.6 percent increase in income tax collections indicates an increase in employment, Luebbering said. While unemployment remains high, it has been decreasing in the past months.

 

July's unemployment rate was 9.2 percent. August's unemployment rate has not been released yet.

Although sales and use tax collections increased slightly in August, they are down 4.2 percent for the fiscal year, despite the increase in individual income.

"Even though that individual income tax line is starting to turn around a little bit, people are still very hesitant to spend money," Luebbering said. "That's being played out all over the country."

Net general revenue collections are down 1.4 percent for the 2011 fiscal year, which began July 1. The chance of a double dip recession, or a second downturn in the economy, remains a possibility for the country, Luebbering said. Barring another recession, she said the state expects to meet the forecasted 2.3 percent increase in net general revenue collections by the end of fiscal year 2011.

"Slowly, the economy's turning around, slowly people are going back to work," she said. "It's just, I would say, cautious optimism that we're going to hit that number (2.3 percent) at the end of the year."