November 18-- State Senator Jack Hill of Reidsville provides some insight regarding revenue growth to the state's coffers in his weekly "Report from the Senate."
TITLE/TAG FEES, CORPORATE INCOME TAXES LEAD OCTOBER REVENUES
At 5.9% growth for October, state revenues were up satisfactorily but took a different path to get there. The largest category, Individual Income Taxes, was up only 1.4%....not a good sign. Sales Taxes continued to show the downward trend, -5.0%, due to new and used car sales being removed from the category and changed to a title/tag fee. The two bright spots this month were Tag/Title Fees which gained $59.2 million on receipts of $87.9 million for a 207.2% growth...and, Corporate Income Taxes were up $34.6 million on receipts of only $30.5 million. That may sound strange, but there was a negative figure in October of a year ago.
Total Revenues for the month were $1.46 billion and the $81.8 million gain amounted to a 5.9% increase.
Inside the numbers, it appeared that in Individual Income Taxes, the increase in refunds of $13.3 million ate up all of the increase for the month leaving the category with a miniscule 1.3% growth. Withholding payments were up slightly, less than 1% and Individual Return payments were up$18.5 million or 29.9%, which is a good sign of continuing strength in small business.
When you combine the decrease in sales tax amounts with the increase in the tag/title fee, the combined or "effective" sales tax collection, as I like to call it, shows an increase of 8.0%.
Other categories reporting were Motor Fuel Taxes increasing by 9.3% and tobacco and alcoholic beverages, both negative at -17.9% and -12.9% respectively.
YEAR TO DATE TOTALS AFTER ONE THIRD OF FISCAL YEAR
October completes four months of the fiscal year or one third of the year. State Revenues stand at $5.9 billion with an increase YTD of $329.1 million or a 5.9% growth rate. Not to be overly negative, it is safe to say the numbers are not as good as at first glance. The largest category of revenues, (Individual Income Taxes), usually about half of all state revenues, stands at 4.0%, YTD, on receipts of $3.1 billion with an increase of only $120.1 million.
Sales Taxes net to the state total $1.6 billion, or -7.2%, and are negative at -$129.1 million, wiping out the increase in Individual Income taxes. Only when you include the Title/Tag fee gain of $255.1 million, do you get a positive number for the year so far. Sales taxes look pretty good after calculating in the title/tag fee increase, showing a gain of $126.0 million or a 6.6% "effective" sales tax increase.
The other positive category is Corporate Income taxes, another positive for the state, showing a $63.4 million increase or 36.0% YTD.
Motor Fuel Tax receipts continue to improve showing an overall increase of 8.2% with an increase in Excise, by the gallon, taxes of 8.7% and motor fuel sales taxes by 7.5%.
Tobacco and Alcoholic Beverage Taxes are positive YTD, at 12.5% and 2.0% respectively.