It was hard to find good news in the state’s September Revenue Report as the total revenue of $2.2 billion only showed a $15.7 million gain, just 0.7%. September completes the first quarter of the 2020 Fiscal Year and the revenue results so far are dismal.
Presently, Year-To- Date totals are up only $21.1 million. So far this fiscal year, the state is under budget by about $145 million. This alarming trend is behind Gov. Kemp’s announced budget cuts of 4% in FY 2020 and 6% in FY 2021.
State’s largest revenue sources negative
Individual Income Taxes were negative for September, down -2.4%. Year- to date Individual Income Taxes are also negative at -0.5%. Withholding refunds were up $36.1 million for the month while Individual Withholding payments increased $1.9 million. Individual Income Tax Return payments were up $8.6 million for the month.
Sales taxes slide
For the first noticeable time, Net Sales Taxes, about 28% of state revenues, have slipped in the first quarter, negative -1.0% for September. Importantly, Net Sales Taxes are only up 1.5% for the first quarter.
The other component of Sales Taxes are Title Ad Valorem Taxes, which includes the one- time fee paid on automobiles. These collections declined -$20.3 million in September. For the quarter, Ad Valorem Taxes are down -7.3% or -$16.4 million.
So the total Sales Tax/ Car Fees category, about a third of state revenues, has only grown $7 million on revenues of about $1.7 billion for the quarter.
85% of revenues categories showing anemic growth
To sum it up, the two top categories, Individual Income Taxes and Sales Taxes/ Auto Fees, have grown little so far this fiscal year, up only about $7.6 million. That in and of itself explains why the state is under budget $145 million.
Other categories mixed
The balance of the revenue categories are trending downward as well. Corporate Income Taxes were up $46.2 million in September but after one quarter, are only positive by 0.8%.
Tobacco Taxes were negative in September -10.8% and negative for the quarter -6.7%. Alcohol beverages were up slightly in September, 0.4% and up 1.1% YTD.
Motor fuel collections slip
One of the steady increases in revenue is usually Motor Fuel Taxes and Fees. But in September, net Fuel Taxes/ Fees were down -1.9%. Year-to-date Motor Fuel Taxes/ Fees are flat, decreasing -$1.9 million on $519.0 million in taxes and fees.
So for the first time, this category has slowed and appears to have stopped growing. Maybe it is going to be difficult to see trends in this era of national tax policies having direct effects in states revenue streams, but it is very confusing and mystifying to hear anecdotally that taxpayers are paying more in Georgia income taxes on their returns and not to see any windfall showing up in the revenue returns.
Regardless, Georgia remains at the lower end of states in revenue growth for the fiscal year as well as the past 12 months.
to trail Southeast
Whether you are tracking the current fiscal year after three months or looking back a year, Georgia continues to trail other southeastern states in revenue growth. Below are the states we have been able to get current revenue growth figures:
Year to date
➤ Texas — 23.1% (Oil revenues causing swing)
➤ Louisiana — 8.0 % (Also volatile due to oil revenues)
➤ Alabama — 5.1% (Has traditionally trailed Georgia)
➤ Arkansas — 2.9%
➤ Kentucky — 1.1%
➤ Georgia — 0.4%
➤ West Virginia — -1.8% (Had extraordinary gains in FY 19-fantasy sports betting, coal)
12 month trailing average through September
➤ Texas — 19.3%
➤ West Virginia — 7.3%
➤ Alabama — 6.2%
➤ Arkansas — 6.7%
➤ Louisiana — 4.4%
➤ Kentucky — 4.1
➤ Georgia — 3.4%
October was a good month for Georgia’s revenues last year and may be this year or it may be hard to beat. While three months is just three months, still it is worrisome that state revenues are so anemic. Additionally, net sales taxes are trending downward as are the fuel tax collections. It is just hard to find any good news in these revenue numbers so far this fiscal year.