Friday, June 16, 2017
NOTES FROM THE SENATE, JUNE 16, 2017
GEORGIA - A YEAR OF SUCCESS
Georgia has continued to grow and as the state's population has grown - around 100,000 to 110,000 per year - our state revenues have continued to grow. But we should not take this success for granted. Many states are not progressing the way that Georgia is.
This column reviewed the May state revenues report and the good news is that state revenues were up 10.3% for the month... and it appears the state is catching up with refunds and apparently there won't be an end-of-the-year glut of payouts.
Year-to-date, after 11 months of the fiscal year, state revenues stand at a 4.7% increase year over year, and most importantly, the state is $276.3 million or so ahead of the budget we have passed for this fiscal year. It appears we will be pushing the $2.5 billion dollar level for our revenue shortfall reserve, or "Rainy Day Fund," this fiscal year, as any overage will lapse into the state reserve.
This 4.7% increase is genuine growth and not inflated by fuel tax/fee revenues. About half of 1% of Georgia's growth is attributed to fuel tax growth.
GEORGIA COMPARES WELL!
As we compare to other states, we see how fortunate Georgia is when we look at 12 month trailing averages which give us a good look at trends. Georgia's trending average rate of growth is 4.7% right now.
Texas, for example, is in its second year of falling revenues, showing a negative 4% growth rate, and last year their growth was negative as well. The oil dependent states like Oklahoma and Louisiana have been running deficits and having to cut budgets.
The National Conference of State Legislatures reported last week that some 22 states are facing a revenue shortfall this fiscal year or next fiscal year... meaning that they are receiving less in revenues than they are budgeted to spend. Thirteen of those states have shortfalls this fiscal year - right now!
A later report this week by the National Association of State Budget Officers revealed that 33 states report revenues in FY2017 coming in below projections.
GEORGIA - BUSINESS FRIENDLY PAYS OFF
So why is Georgia continuing to succeed? A number of reasons are evident. A strong pro-business environment in the state is paying off. The "Best State to Do Business" ranking is not just a cliché, but a result of policies that are business friendly, especially compared to the high tax states.
Atlanta's airport is continuing to hum along and is an important piece of Georgia's economic development. Just consider how the ease of daily flights from company headquarters in Atlanta makes worldwide business easier to transact. The ports of Savannah and Brunswick both are showing incredible growth and importance to the entire state. The first five reports from the ports in 2017 certainly reflect that growth:
January - 26% overall tonnage increase
February - 10% total cargo increase, best month second only to January
March - 5.6% increase in container units... Brunswick 22.5% increase in autos and machinery
April - 11.7% increase in TEUs (Twenty Foot Equivalent Unit)... total tonnage up 13%
May - Broke record... TEUs up 11.68% as the second maximum size ship came through
And isn't it exciting to watch the future unfolding right before our eyes? One can begin to see the future of shipping as more super max ships unload in Savannah.
Incidentally, 25% of all calls on Savannah ports this year have come through the Panama Canal, so that expansion is paying off.
GEORGIA - "YOU OUGHTA BE IN PICTURES!!"
The growth of the film industry continues to amaze, with Georgia coming in first in production in a ranking of the 100 highest grossing film productions. What is encouraging is the continuing investment in facilities like sound stages in the state, which insures that film production has a permanent home.
We are also starting to produce skilled employees for film production from the film academy in some of our colleges and technical schools. And just to put an exclamation point on the film industry, film productions spent over $2 billion in Georgia in FY2016.
'IT AIN'T BRAGGIN IF IT'S TRUE'
As far as overall job growth goes, our figures tell it all. Georgia's Department of Economic Development reports that in the first 11 months of this fiscal year, ending in June, they have landed a total of 366 new projects for the state, producing 28,154 jobs on investments totaling $4.988 billion dollars. Georgia has already exceeded the 12 month total for FY2016.
Certainly our state has challenges to face. But from where we are today, we control our destiny in Georgia. No challenge is too large with cooperative state leadership, the business community and all of the positive factors we have going for us as a state. I truly believe that our best days are ahead of us and not behind us.
As always, I welcome any questions you may have.