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Some history of the elements of Georgia's revenues
Hill Jack
Sen. Jack Hill

mbers from the Department of Revenues' report and discuss how the state is doing. It hasn't always been this strong or positive for the state.  And there are sections of the Revenue Report that have a history.  This seemed like a good time to both compare where the state is to other Southern states but also to look more deeply at the areas of the revenue report. First the good news.


Georgia at or near top of Southern states

Whether you look at the first three months of the fiscal year or look back 12 months, Georgia compares very well in either ranking. CAUTION, each month there is a state that has a temporary increase for any number of reasons.  Also, one reason we look at both the Fiscal Year numbers and the 12-month trailing average is because this smooths out the bumps, dips and fluctuations.


First quarter revenue results

July/August/September revenues compared to same period a year ago.  (For states we have info)


Georgia — 6.0 percent

Alabama — 8.5 percent

Arkansas — 6.8 percent

Kentucky — 4.4 percent

Louisiana — 6.2 percent

Mississippi — 1.9 percent

Texas — -4.7 percent

Virginia — 2.7 percent

West Virginia — 17.9 percent


12 month average smooths out year, identifies trends

We take the current month revenue growth and go back 11 more months.  This changes each month, or "trails", identifying the actual growth rate trend, whether it is moving up or down.


12 month trailing average through September (for states we have info on)

Georgia — 5.1 percent

Alabama — 5.7 percent

Arkansas — 3.6 percent

Kentucky — 3.5 percent

Louisiana — 7.0 percent (Raised Taxes)

Mississippi — 2.3 percent

Texas — 9.1 percent (Oil Revenues Back up)

Virginia — 6.0 percent

West Virginia — 5.1 percent               


Georgia has remained consistent and does not bounce around like some states.  The oil producing states particularly suffer when world oil prices are depressed and have boom times when prices reach new highs.


Georgia ahead of budget, revenues ahead of last year

As reported previously, Georgia's conservative budgeting and conservative revenue estimate produce good things for the state.  First, if the economy slips during the year, the state can absorb a decline, as pointed out in last week's column on stress testing of states. 

 Also, a conservative revenue estimate builds in a cushion that helps to continue to build our rainy-day fund, the RSR.  Georgia's reserve is expected to be about $2.7 billion after all lapsed funds in June are accounted for.

So far in FY 2019, revenues are ahead of FY 2018 by $329.9 million.  Compared to the budget the state is operating under so far, revenues exceed budget requirements by some $189.6 million after three months.

Some history — HB 170, the fuel tax

Fuel taxes have a long history in the state, dating from the original one cent Excise Tax in 1921 to seven cents in 1950.  The rate increased to 7.5 cents in 1971.  In 1979, a second motor fuel tax was added when a 3 percent sales tax was placed on fuel.

In 1989, the state sales tax was increased to 4 percent leaving the 7.5 cent excise tax on fuel and the 3 percent sales tax added to a 1 percent general sales tax including fuel.

Changes in the collection of the taxes on fuel occurred through the years, but the largest change happened with the passage of HB 170 in 2015.  This legislation converted all Motor Fuel Tax revenue to an excise tax, raised it slightly and applied the Motor Fuel portion of sales taxes to be dedicated to transportation, removing the revenue from the General Budget. The Legislature added an Impact fee and a $5.00 per night hotel/motel fee with all funds going to transportation.  The legislation also froze the local portion sales tax on fuel to 1 per cent of the retail price of motor fuel, capped at the $3.00 per gallon level.


What about those title tax fees?

HB 386, passed in 2012 and effective in 2013, required all ad valorem taxes on vehicles (requiring a title) changed from a sales tax at purchase and Ad Valorem tax at each "birthday."  This changed to a one-time market value fee now at 7 percent.  The complicated part of many parts was how the fee is split during that initial period and in later years between local and the state governments.  This split has been changed in HB 329 in the 2018 session.

Much political maneuvering occurred between school boards, local governments and the state, as represented by the legislature.