State general fund tax collections for the first seven months of the fiscal year decreased by 5.4 percent compared with the same period last year, but the decline wasn't as severe as the drop in revenues reported in the first half of the year.

The state Department of Taxation yesterday reported that general fund revenues since July 1, 2009, were $2.46 billion, a 5.4 percent drop from the $2.6 billion reported last year. Although tax collections continue to be below last fiscal year's totals, the latest report is an improvement from the 8.3 percent decrease in collections reported in the first six months of the year.

The state still has a ways to go if it intends to meet projections made by the Council on Revenues for the fiscal year, which ends June 20. The council projected that revenues would be down 2.5 percent.

The only bright spot in yesterday's report was the 3 percent increase in the transient accommodations tax, commonly known as the hotel room tax. During the first seven months of the year, the state collected $124.5 million, compared with $120.9 million for the same period last year.

This is the second straight month where there was an improvement in transient accommodations tax collections. During the first half of the fiscal year, the Tax Department reported a 1.5 percent increase in this category, compared with the same period last year.

In its preliminary report yesterday, the Tax Department also said that general excise and use taxes, the largest category of collections, decreased by 6.7 percent during the first seven months of the year.

Individual income taxes were down 6.7 percent. Corporate taxes, which currently make up 3 percent of overall revenue, were down 67 percent.