Friday, July 15, 2016
NOTES FROM THE SENATE, JULY 15, 2016
REVENUE INCREASE FOR FY APPROACHES $1 BILLION
June state revenues of $1.9 billion capped an incredible year for Georgia with total collections over $20.8 billion. June was a positive month even excepting Fuel Taxes/Fees, gaining 0.7% despite over $109 million in refunds going out to individual income tax payers. Individual income tax collections increased 1.7% for June, with Withholding Payments up $49.5 million while aforementioned refunds were up $31.9 million and Individual Estimated Payments were down $11.1 million.
Net Sales Taxes were slightly negative at -2.0% or $9.4 million but without the 1% fuel sales tax flowing to the treasury before HB 170 passed. Tobacco taxes were positive at 6.6% and alcoholic beverages were up 2.3%. Title Ad Valorem revenues were positive for the month at $83.0 million. Corporate taxes were negative for the month at -7.5% down, but totaled $178.0 million collected.
FUEL COLLECTIONS CONSTANT
Motor fuel excise taxes for the month collected $147.5 million on an increase of $60.8 million. Highway Impact Fees came in at $1.6 million and Hotel/Motel Fees collected $14.5 million for a June total of $77.0 million.
FISCAL YEAR NUMBERS ARE GANGBUSTERS!
Even without counting the Fuel Tax/Fees of $798.6 million, net revenues still exceed $20 billion at $20.01 billion and the overall rate of increase for the year is a healthy 5.2%. Individual income taxes show a robust 7.9% gain for the Fiscal Year and Net Sales Taxes are positive at 0.6%.
Sales taxes being positive for the year is a good sign considering the category lost approximately $150 million in Fuel Sales Taxes when the last penny was included in the fuel revenues going to DOT. And, of course, new and used car sales taxes are now reported separately as a title/tag fee and are not included in sales tax numbers for the third year.
Tobacco taxes were positive for the year at 2.2% as were alcoholic beverages at 3.3%. Title Ad Valorem taxes gained $110.9 million or 13.4%.
Corporate tax collections was the one negative category, showing -1.9% or -$19.1 million.
FUEL REVENUES COVER APPROPRIATED AMOUNT
Fiscal year collections for fuel tax/fees came in at $798.6 million and, added to the $150 million estimate in Fuel Sales Tax now going to DOT, more than covers the appropriated amount of $758.7 million appropriated to the DOT in the FY 2016 Amended Budget. Fuel excise taxes accounted for $633.6 million, Highway Impact Fees came in at $14.3 million and Hotel/Motel Fees totaled $150.6 million for a total amount of $798.6 million.
REVENUES AHEAD OF BUDGET
Mentioned above that the net increase for revenues without fuel taxes/fees totaled within a few million of $1 billion. Based on the Amended FY 2016 Budget passed in March, it looks like revenues will exceed the amount budgeted by approximately $570 million. Funds not appropriated and spent by June 30 will lapse into the Revenue Shortfall Reserve or RSR.
IS THIS THE YEAR RSR REACHES $2 BILLION?
Getting the RSR, or as we call it the Rainy Day Fund, up to a goal of $2 billion has been a stated objective of Governor Deal and House and Senate Leadership. While it is premature to predict figures, and the Midyear Education Funding must be considered, it is assured that several hundred million will be added to the RSR and the new total will approach $2 billion or about 2/3 of the $3 billion cap of 15% of the previous year's revenues. Reaching the $2 billion plateau would be a cause for celebration considering Georgia's RSR was basically near "0" during the recession.
12-MONTH AVERAGE NOW THE FY TOTAL - GA STILL COMPARING WELL
Once a year, the 12-month trailing average we use to track state revenues and use for trending analysis matches up with the Fiscal Year. Georgia continues to compare very favorably to the states we can gain information from at this early July date.
Texas - 13.2%
Louisiana - 4.9%
We will share more info in the coming weeks as we receive it. Suffice it to say, Georgia has completed a stellar year economically and is poised for whatever comes ahead.