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Friday, August 10, 2018

NOTES FROM THE SENATE, AUGUST 10, 2018

STARTING THE FISCAL YEAR OFF RIGHT-REVENUES UP, RESERVES AT 10.3%

July begins the FY 2019 Fiscal Year. Since July of last year was a negative revenue month, it was important that July of 2018 be a positive month. While not a terrific revenue month, July came in at a gain of 3.5%, a respectable increase that comes close to matching the normal revenue growth built into the budget. We'll have a column later on reserves, but Georgia's reserves are at an all-time high.

INDIVIDUAL INCOME TAX COLLECTIONS UP 4.1%

There were some good signs within the positive growth of this category, which, as I've often reminded you, makes up about 50% of Georgia's revenue. Within the 4.1% growth, Individual Withholding payments were up $53.7 million and the total of other categories increased $11.5 million. Refunds were up $29.6 million as I continue to hear from constituents who have had their Ga. Tax refunds hung up and not paid by the state.

BUSINESS IS GOOD-CORPORATE RETURNS UP

Corporate returns, while not a large category, about 5% of total revenues, is nevertheless a bellwether for how business is getting along. Within this category, Corporate Estimated Returns were up $12.6 million and Corporate Tax payments increased $1.5 million or 14.7%. Refunds were up 9.4%.

SALES TAXES LEVEL

Like so many months throughout the past year, net Sales Tax revenues remained constant at 3.0% gain for the month on $523.8 million in collections.

OTHER TAX CATEGORIES-MOSTLY DOWN

The rest of the revenue totals were all negative. Tag, Title and Fees and Title Ad valorem taxes were both negative at -15/2% and 10.9% respectively. And Tobacco and Alcoholic Beverages were also down at -4.4% and -4.0% respectively.

FUEL TAXES, FEE REVENUE UP FOR THE MONTH

The excise taxes collected on fuel and dedicated to DOT were positive in July, up $7.7 million or 5.3%. Highway impact fees were flat at positive $23,000 and hotel/motel fees, gained $661,000 or 4.4%. All together Fuel Tax/Fees revenue was up $8.4 million or 5.2%.

TOTAL REVENUES FOR THE MONTH WERE $1.778 BILLION

The state budget is off to a good start. This month's revenues puts the state about $15 million ahead of budget. So, while not a gangbusters start, July is certainly a good positive start to the New Year.

OTHER STATE'S REVENUES-SOME UP-SOME DOWN-OIL STATES GAIN

It's always interesting to look at other states' revenue and see how we compare. One noticeable fact is that the rising price of oil has helped the oil producing and refining states and their revenue growth numbers generally show it. Below are the 12 month trailing averages through either July or June if that is all we have.

Georgia 4.2%
Alabama 4.3%
Texas 10.3%
West Virginia 2.7%
Arkansas 1.7%

Through June

Florida 5.5%
South Carolina 7.1% (Gain attributed to one-time capital gains income)
Tennessee 4.1%
Mississippi 2.6%
Louisiana 5.5%
Kentucky 3.0%

All in all, Georgia continues to prosper and grow with revenues strong and unemployment at a historic low.

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