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A good start to fiscal year
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July’s revenues (taxpayers hard-earned dollars) began the 2008 fiscal year in a strong showing with $1.3 billion in revenue or $1.2 billion not counting gasoline taxes. This was an increase of 11.1 percent outside of gasoline taxes.

The net total increase for the month was $149.6 million.

Individual income taxes led the way with a 5.5 percent increase or $33 million increase over July of 2006. Sales taxes brought in more new revenue in July than income taxes with a net increase of $70.2 million or 15.6 percent net (not allowing for gasoline taxes).

Corporate income taxes had a strong month growing by $40 million or a whopping 542 percent over July 2006. This increase however, was partially the result of a $27 million refund to a corporation in 2006.

Every incidental tax category including tobacco and alcohol were positive for the month.

Total motor fuel taxes gained $1.4 million, yet excise taxes (by the gallon) were down $2.4 million from 2006.

Income tax as a percent of the total taxes collected, slipped to 48.6 percent due to sales taxes and corporate taxes having such a strong month. Sales taxes accounted for 39.9 percent of the total taxes collected and corporate taxes about 3 percent.

There are three major categories within sales and use tax. The first is food, which was up 7.6 percent (this category is only collected and distributed to local governments.) The next highest category is automotive which was up 17.3 percent compared to July 2006. General merchandise, the third major category, was up 6.1 percent. Only lumber sales and use taxes were below last year at -0.2 percent. This was a reflection of the slowdown in the home-building market.

For the first time in a while, excise fuel taxes were down for the month compared to last year, about — 5.6 percent or $2 million. However, gasoline sales taxes increased by 10.6 percent.

Corporate taxes’ increase was led by estimated taxes that were up $7.8 million or 33 percent and collections from tax returns were up $4 million or 189 percent. Refunds were down $27 million or 81.8 percent, a major factor in the increase.

All in all, July proved to be an encouraging month. Some of us will have to look long and hard to find bad news within these numbers (i.e. lumber being down -0.2 percent).

Over the past couple of weeks, this column has examined the SFY 2008 budget that was passed by the General Assembly. This budget was based on $19.2 billion for activities that depend on revenue collections. To meet this goal, we need growth of 3.33 percent to make budget. Adding 1 percent for the K-12 growth next fiscal year, the current growth rate needed is 4.33 percent.

Visit the Legislature’s home page at
To view the FY2008 budget in its entirety: - Tab - Budget Reports
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