Usually by Labor Day, the State Accounting Office publishes the ultimate revenue document the “Georgia Revenues and Reserves Report” for the Fiscal Year ended June 30, 2019.
For those of us who hang on every number, this document contains a mountain of revenue data and tax collections of every sort along with fees and the up to date RSR (Revenue Shortfall Reserve) Fund total. Of course all of these taxes and fees are reported to the Office of State Treasurer (OST).
Now to admit to enjoying this document might seem nerdy to some. But if you like your information straight and not flavored by press selection, then this is the document for you!
Some of the highlights of the Revenues and Reserves Report are:
➤ Listing of what agencies collected
➤ Analysis of Revenue Shortfall Reserve
➤ Reserves for the Lottery and Tobacco Settlement
➤ Legislative Appropriations and Allotments
➤ Motor Fuel Taxes and Fees
Nobody is surprised that the Department of Revenue collects more than any other agency, $23.7 billion. Next is the Dept. of Insurance at $572.1 million and third being the Dept. of Community Health with $508.5 million.
Other significant collectors include Office of State Treasurer, $195.3 million, Secretary of State’s Office, $105.2 million, Superior Court Clerks Cooperative Authority (add-on fees), $83.7 million, Agriculture Dept., $21.03 million and Banking and Finance, $23.5 million. The Dept. of Natural Resources collects $61.6 million in fees and fines.
Info on the revenue shortfall reserve (RSR)
You read about the RSR and you just see one number, but there are a set of calculations that could be important at various times in the conduct of the state’s affairs. The calculations start with the previous year’s fund balance July 1, and adds the Agency Surplus Returned. From that total is subtracted the Midyear Adjustment for Education. That total becomes the Adjusted Revenue Shortfall Reserve Total. Then any revenues left over from the collections after subtracting the appropriations and other deductions leaves the current Revenue Shortfall Reserve. As of June 30, 2019, that total is $2,971,844,638.81.
The last paragraph spells out the maximum Reserve, 15% by law, which this year would be $3.835 Billion. The next item lists the authorized 1% of General Fund Receipts that can be appropriated for the Midyear Education Adjustment and for this year that number is $255.7 million.
What does not come very often is the provision that allows the Governor to appropriate reserve funds, in excess of 4% of net revenue collections, in the Reserve without Legislative approval. If he chose to do so, that amount this year would be $1,022,842,588.00.
Lastly, the Report lists the current years Reserve as a percentage of the State General Fund Receipts, 11.62%.
We forget how important the Lottery Reserves are, but if you are watching the double digit increases in the Zell Miller Scholarship and steady increases in the HOPE Scholarship, it is readily apparent that the day is fast approaching when expenditures will outpace Lottery revenues and the Reserves will start to dwindle. The Zell Miller Scholarship has grown from expenses of $100.1 million in 2014 to $190.5 million in 2018.
The Lottery Reserve starts with the previous year’s Reserve which was $1.169 billion on July 1, 2018. Lottery proceeds of $1.207 billion are added to Interest Earned, Surplus and Agency Lottery Surplus Returned, to total $1.311 billion. Deductions total $1.204 billion for an ending Reserve for Lottery for Education June 30, 2019 of $1,277,266,454.69. The Reserve is up this year by $107.3 million.
The Lottery Reserve is split into two parts:
➤ Restricted (50% of prior year proceeds)
➤ Ending Reserve
The Tobacco Settlement Funds showed a June 30, 2019 ending Reserve of $79.6 million.
Legislative appropriations and allotments
This page shows the collections of State General Fund Receipts from Revenue and premium taxes for Total Net Taxes. All of the other sources of revenue are listed including Lottery and other payments to result in Total State Treasury Receipts. After adding Agency Funds Lapsed and subtracting the Midyear Education Adjustment, the final Total State Funds totals this Year $27.370 billion.
The balance of the report lists available funds from reserves, deducts state appropriations and results in a Total Ending Fund Balance at June 30, 2019 of $4.382 billion.
Motor fuel funds collections
This calculation lists the various motor fuel tax and fee collections for FY 2019 and totaled $1.8 billion from motor fuel taxes. The report shows the FY 2020 Original Appropriations of Motor Fuel Funds of $1.9 billion. Hotel/Motel Fees totaled $180.0 million and Highway Impact Fees were $11.4 million for a total of $191.5 Million less refunds for a grand total of $191.4 million.
State Tax collections are big business and the efficient and detailed handling of those funds is important. It is reassuring to see the state is collecting interest on its cash collections and handling its debt in a business like way. While we may not look into these numbers very often, you can be sure the bond underwriters are looking at the way the state handles its business and that confidence helps explain the state’s long history of AAA ratings.