Friday, October 12, 2018
NOTES FROM THE SENATE, OCTOBER 12, 2018
BOOMING SEPTEMBER REVENUES PUSHES FIRST QUARTER TO 7.0% GAIN
Whatever the state of Georgia is doing, we need to not change a thing. The third month of the new fiscal year produced an outstanding gain in revenues, totaling a 7.4% increase overall. This propelled the state to a 6.0 increase for the first quarter of the 2019 fiscal year. Further down in this column, we'll look at other states' performances and compare.
A DOUBLE DIGIT INCREASE FOR INDIVIDUAL INCOME TAXES
Individual Income Taxes increased 10.0% for September on revenues of $1.157 billion, a gain of $105,604 million. Refunds were only up 1.6% while Individual Withholding payments increased$62.9 million. Another category that showed growth was Non-resident Income Taxes, growing $21.3 million for the month. Other categories were up $22.3 million. Corporate Income Taxes were up 4.5%, about $9 million.
NET SALES TAXES CONTINUE UNPRECEDENTED GROWTH
Catching the wind of the national increase in retail sales, net sales taxes again had a fantastic month, gaining 7.0% on revenues of $514.1 million. Apparently there has been a surge in retail spending that Georgia might be taking advantage of.
An August 15, 2018 article in the Wall Street Journal related that retail sales for July were up 6.4% for the month, twice the rate of inflation, much higher than forecasted.
The article credited increased hiring and low employment with giving families more income to spend. Sales at food and drinking establishments increased 9.7% from a year earlier.
This graph illustrates Georgia's sales tax growth over the past months. You can see the general trend towards higher sales tax collections.
OTHER CATEGORIES MOSTLY POSITIVE
Both Tobacco taxes and Alcoholic Beverages increased 1.4% and 1.9% respectively. Tag, Title and Fees were up slightly at 1.8% but Title Ad Valorem taxes were negative at -3.4%.
GASOLINE TAXES/FEES UP 4.3%
We track the excise taxes on motor fuel and the two fees since those revenues go straight to DOT. This month, Excise Taxes were up 4.4%, Highway Impact Fees increased $162,000 and Motel/Hotel Fees increased $388,000, Altogether Motor Fuel taxes and fees were up $7.4 million or about 4.3%.
YEAR TO DATE NUMBERS ALL VERY POSITIVE
Overall the state is really doing well. Total revenues stand at $5.8 billion, showing an increase of a whopping $329.9 million, a robust 6.0% growth rate. Individual Income Taxes are growing at a 7.9% rate and Corporate Taxes at a 10.7% rate. Net Sales Taxes are showing a very strong 7.1% increase.
LESSER CATEGORIES UP AND DOWN
Tobacco Taxes are negative for the year at -1.3% and Alcoholic Beverages are positive at the same number, 1.3%. Tag, Title and Fees are slightly negative at -0.6% and Title Ad Valorem Taxes are also negative at -10.4%.
FUEL TAX REVENUE STRONG AS WELL
Motor Fuel Excise taxes, Impact Fees and Hotel/Motel Fees are all up for the first quarter, a total of $520.9 million. This is an increase of $16.1 million or about 3.3%.
AHEAD OF BUDGET---THE IMPORTANT THING
The state's revenue increases are meeting and exceeding the budget passed this past session. After three months of the fiscal year, revenues exceed the state's 2019 budget by some $189.6 million. Of course excess revenues will lapse into the RSR fund or be considered for expenditure in the Amended FY19 Budget.