It would be a fairly easy conclusion to jump to that the state is some kind of slide downward when most of the key elements reported negative or very anemic in October. Net revenues slipped to barely positive at 0.3 percent gain over October of a year ago. This is the lowest gain per month since April 2014, when we were minus-2.9 percent. Maybe we shouldn’t read too much into one month’s numbers, but there are signals that are concerning. Net sales tax collections were negative, -1.1 percent, for the second month in a row.
For the first time in a long time, individual income tax collections were anemic, 0.6 percent over October 2014. So, for October, Georgia’s two main (83 percent) sources of revenue, (individual income taxes and sales taxes), only gained $461,000 on total revenues of $1.28 billion.
Also disturbing are withholding payments, which were down $9.7 million, considered an indicator of economic activity. Interestingly, refunds were up only marginally, $2.2 million and individual income tax returns were up $27.8 million.
Corporate income taxes were down $13.6 million, but that is not too unusual for the first month of any quarter, but this month did move corporate taxes into negative numbers for the year so far, at -4.1 percent.
Title ad valorem taxes, the car tag fee, were up $9.9 million in October. Tobacco taxes were down 9.5 percent and alcoholic beverages were up 7.6 percent.
One-third of FY16 in the books
Trends may be troubling to a degree, but the fiscal year revenue receipts are holding up very well after four months. Overall, revenues have grown 8.2 percent on some $6.7 billion in revenues, gaining $513.0 million over FY14. In fact, our figures show state revenues exceed the FY15 budget by $175 million so far.
Individual income taxes are up 6.6 percent or $216.8 million year-to-date. Net sales taxes are up slightly at 1.2 percent and corporate taxes are negative at -4.1 percent. Title ad valorem taxes are up 14.3 percent and tobacco and alcoholic beverages taxes are up 1.5 percent and 3.6 percent, respectively.
Fuel taxes —“moving on down the highway"
Maybe it is a combination of lower fuel prices, increased consumption and just dumb luck, but the proceeds from HB 170 seem to be on target. October’s fuel tax collection’s totaled $137.9 million, a gain of $55.5 million. The impact fees totaled $719,000 and the hotel-motel tax took in $13.4 million. All three total $152.1 million going to DOT. (That includes about $15 million in fuel sales tax that previously went to the state treasury.)
Year-to-date, motor fuel taxes have brought in $517.3 million, impact fees, $2.88 million and hotel/motel fee, $41.7 million for a total YTD of $562 million. At this rate, total revenues going to transportation would increase in FY16 to around $1.68 billion compared to around $1 billion last year.
“The bottom line … or lines”
Two weeks ago, this column asked the question “Is Georgia’s Economy Set to hit the “Pause” Button? The October numbers do nothing to dispel the feeling that a slow-down in revenues is beginning to occur. Individual income taxes grew less than 1 percent and sales taxes were negative for the second month in a row. The 12-month trailing average has slipped a half per cent or so, to 6.2 percent growth of total revenues. Maybe it’s just the chill in the air.
I may be reached at
234 State Capitol, Atlanta, GA 30334
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E-mail at Jack.Hill@senate.ga.gov
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