Friday, January 13, 2017
NOTES FROM THE SENATE, JANUARY 13, 2017
SESSION OPENS - REVENUES DRAG
There is a great feeling of anticipation at the state level just as there is at the federal level as the 2017 General Assembly opened for a 40 Session day period, hoping to adjourn in late March.
Generally, the state is in good financial condition as Governor Deal presented his FY 2017 Amended and FY 2018 Budgets for Legislative review and approval. In the coming weeks, we will pass on his proposals in detail. The state's Revenue Shortfall Reserve, RSR, has risen to just over $2 billion or enough to operate the state about 40 days should a calamity put state collections out of business.
JANUARY REVENUES CONTINUE TO LAG
Although the total revenues for the month exceeded $2 billion at $2.058 billion, collections were virtually flat at 0.7%, for the month, even considering the new fuel revenues. Somewhat sobering, is the Individual Income Tax total, barely covering January, 2016 collections growing only 0.1% or only $768,000. That category accounts for close to half of Georgia's tax collections. Corporate collections were negative at minus $37.3 million or -18.6%. Sales Taxes continue to be encouraging, gaining $39.4 million or 9.2%. Title Ad Valorem Taxes showed a positive $11.8 million gain or 17.4% and total fuel receipts from all three categories increased $10.01 million.
YEAR TO DATE NUMBERS SLIPPING
With 6 months of the Fiscal year completed, state revenues are only $73 million ahead of budget...an alarming decrease in growth compared to recent years. The 12 Month Trailing Average shows a trend of declining growth for the past six months or so and now stands at 6.9%, the lowest in 16 months.
Year to date, overall revenues are up 4.0% which includes the new fuel sources increase. Individual Income taxes are up only 2.6% YTD, much lower than the state has reported in recent years. Corporate Income taxes are negative at minus 2.8%. Sales taxes continue to be a bright spot with net proceeds up 5.2% YTD. Title Ad Valorem Taxes are up 13.8%. Fuel fees and excise taxes are up $105.4 million or about one fourth of the total gain so far this fiscal year.
LEGISLATION INTRODUCED IN THE SENATE THIS WEEK
SB 1-Further defines "Domestic Terrorism" and what actions would constitute domestic terrorism.
SB 2-Requires cities, counties and state agencies to publish a schedule of business and professional fees and timelines for issuance. Provides penalty for exceeding timelines. Requires review yearly of personal information to determine necessity and if information is available from other sources.
SB 14-Changes the Rural Hospital Tax Credit Law to allow Subchapter S corporations and other small businesses that file individual income tax to apply for the credit.
SB 16 - Would amend the current regulation of medical THC oil made from marijuana to reduce the allowable amount of THC, the chemical that causes intoxication, from 5% to 3%. Also adds conditions on the autism spectrum disorder to those which may be legally treated with THC oil.
POSSIBLE ISSUES FOR THIS SESSION
EDUCATION-A focus may be on State Board of Education duties as they pertain to problem schools.
HEALTHCARE-Looks like the state will react to whatever action Congress makes...
CASINO GAMBLING-Any bill to allow this will probably start in the House. I remain concerned about casinos' business case.
CYBER SECURITY-$50 MILLION Amended Budget item in Augusta will create critical mass in conjunction with Fort Gordon's Cyber Security mission.
GOVERNOR'S AMENDED AND GENERAL BUDGET
More later, but highlight is 2% pay raise for teachers to be put in the salary scale.
Combined $46.2 million increase for Move on When Ready college enrollment program
Fourth District Projects in Governor's budget:
$4.9 million, Planning and Design for a new Engineering and Research building at Georgia Southern
$5 million for planning, design and construction of renovation, Hanner Complex at Georgia Southern