Georgia’s April revenues have been awaited with much anticipation. Through March, the state had been treading water, projecting little or no surplus over projections.
April continued the downward trend in revenue collections. Net tax collections for the month declined 1.9 percent or $25.6 million compared to April 2006. Individual Income Tax collections were down 24 percent or $151 million. This is a result of collections from tax returns being down 9.8 percent, estimated tax payments down 62.3 percent and refunds up 23.4 percent. Sales and use tax, however, reported a net increase of 20.7 percent or $91 million, which include gasoline taxes. Corporate income tax collections benefited heavily from estimated tax payments increasing 53.9 percent. Compared to April 2006, corporate income tax collections reported an increase of 34.9 percent or $43 million.
For the year to date the Department of Revenue reported net tax revenue collections of $13.8 billion. This is an increase of 5 percent or $657 million compared to the same period last year. Individual income tax YTD collections are up 4.2 percent or $265 million (YTD withholding collections are up 7.3 percent and tax return filing collections are up 1.2 percent). Personal income taxes are important to look at because this income source represents almost half of our net revenue collections. YTD corporate tax collections were buoyed by April’s collections, showing an increase of 9.4 percent or $67 million.
YTD, motor fuel taxes climbed 21.9 percent or $146 million compared to the same period last year. When broken down into its component pieces, the prepaid portion is up 30.7 percent or $94 million and the excise tax reports an increase of 14.4 percent or $52 million.
Sales tax numbers — sign of slowing economy?
Although YTD sales and use tax collections are up 4.5 percent or $215 million compared to April 2006, category percentages are showing an alarming decline.
Here is a comparison of the first quarter sales increases versus April year to date figures by category.
YTD growth (by percent)
1st Quarter April
Utilities 12.0 5.8
and equipment 12.4 4.0
Automotive 19.9 12.6
Lumber 21.7 5.7
General merchandise 11.9 7.7
Apparel 23.4 10.9
Food 24.6 7.8
The 2007 state fiscal year ends on June 30. With Gov. Perdue’s veto of the Homeowner’s Tax Relief Rebate of approximately $142 million, we need growth of 3.26 percent over last year to make budget. Adding 1 percent to that for the K-12 growth next fiscal year, we find that our current growth rate of 4.11 percent (which excludes motor fuel taxes) will barely cover our needs and contribute little to reserves. May’s 2007 collections will have a difficult time increasing over May 2006 collections which were extraordinarily high at $1.6 billion.
The slowing economy has affected our goal of meeting budget and revenue projections. We have two difficult months ahead of us.
NOTE: The governor has not signed the FY2008 budget (HB 95)
Next week: Legislative review of higher education
Visit the Legislature’s home page at www.legis.state.ga.us
To view the FY2008 Budget in its entirety: www.senate.ga.gov - Tab - Budget Reports
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