As a lady in my district said one time, “There’s been a lot of water under the dam since then.” Well, since last month’s revenue report, there has definitely been a lot of activity “under the bridge” or in some cases “over the dam” and maybe, just maybe “under the dam.”
What seemed like questionable economic activity (see hand-wringing over the unemployment rate) two or three months ago, now seems solidly in the positive growth territory as October’s growth of 5.9 percent pushed the first four months, or one-third of the year, to a full 5 percent growth year-to-date. This rate of growth would put Georgia into the top category of states nationwide, according to NCSL’s state-by-state revenue projections published earlier this year.
October’s overall growth of 5.9 percent is robust, with individual income tax continuing last month’s surge at 8.7 percent growth. And net sales tax to the state continued solid growth, showing an 8.0 percent increase for October. As regular readers will remember, those two categories account for 80-85 percent of state revenues.
October is not one of the top months of the year for revenues, but the total of $1.553 billion is some $87 million ahead of October 2013.
Motor fuel tax collections continued to drag in October, showing a net 2.4 percent decrease with sales tax declining 5.7 percent and excise tax positive at 2.0 percent.
Corporate taxes declined in October some $30.5 million to drag the category into negative territory for the year. Usually a clearer picture of corporate collections is gained looking at quarterly results.
Tobacco and alcoholic beverage collections were both up, 8.3 percent and 3.9 percent, respectively.
Even after moving into the second year of the tag/title fee substituting for new auto sales taxes, the category continues to show gains. October numbers were up $10.3 million, or 11.8 percent over October 2013.
Inside the good October numbers
The 8.7 growth in October revenues in individual income taxes was led by withholding payments up $60.7 million, a prime indicator of payroll growth. All other categories were up $8.5 million as well. And these increases happened in spite of a small increase in individual income tax refunds, which were up $2.5 million.
Sales tax news was good for local governments, an increase of $28 million over last year and net sales taxes to the state increasing by $33.4 million, while sales tax refunds declined by $3.5 million compared to last year.
Corporate tax receipts were affected by a large increase in October in tax refunds of $24.2 million. Also, corporate collection categories were down some $6.2 million
Year-to-date revenues top budget by $111 million
Not only are state revenues ahead of FY 2013 by some $298.4 million, but this rate of growth exceeds what is needed to meet the budget passed last spring by the legislature by $111 million. So the winner will eventually be the state’s “rainy day” fund, or the revenue shortfall reserve, which will pick up lapsed funds at the end of the fiscal year.
It appears the RSR will exceed $1 billion for the first time since 2007. That amount would operate the state for about 20 days in the event of a catastrophe. Of course, an amended appropriations bill will reduce some gain in revenues.
Some of the numbers at the end of October are exhilarating, to put it mildly. Total revenues at $6.2 billion, individual income taxes up $156.7 million or 5 percent. Net state sales taxes were up 7 percent, or $117.3 million. Local sales taxes also are up 7 percent, or $104.9 million.
Motor fuel collections continue to decline slightly, -2.8 percent or -$9.8 million. We’ll await Corporate tax numbers the next two months of the quarter, but after four months, a category that has been growing is negative at -6.3 percent, or -$15.1 million YTD.
Tobacco taxes are down 1.2 percent, and alcoholic beverages are positive at 4.3 percent. The tag/title fee continues positive growth at 9.2 percent or $32.9 million for the year.
If this trend continues, the state is poised for positive decisions on budgetary issues this coming year.
I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7092 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-Free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811
