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December 16--  Notes From the Senate

STATE WILL NEED HUGE INCREASES IN NEXT MONTHS

November state revenues continued the very worrisome trend of flat/decreasing state revenues with a monthly total of -1.2%. So not only did the revenues not break even with last year, the total does not account for the increases in budget the state is presently operating under. In other words, revenues should be increasing at least $70 million per month just to meet the budget we are operating with.  
WHAT ARE THE ODDS OF 3 TREMENDOUS MONTHS OF THE 7 REMAINING?
Right now, the state needs a couple of $300 gain months and another month of about $100 million ahead just to meet the present budget the state has passed. Last year, in the final 7 months, here is how they turned out:
December
Minus $102 million
January
Minus $314 million
February
Up $67 million
March
Up $108 million
April
Up $559 million
May
Up $1 million
June
Up $146 million
So what are the odds?
OCTOBER NUMBERS CONTINUE TO CONCERN
Within the revenue numbers, Individual Income Taxes for November were negative -$31.3 million or -3.4%. Corporate Income Taxes were also down, -$23.1 million.
  
SALES TAXES REGAIN SOME MOMENTUM
About the only bright spot in the revenue report was Net Sales Taxes which regained some ground with a positive 6.9% gain for the month.
OTHER NUMBERS REMAIN TROUBLESOME
Title Ad Valorem Taxes continued a downward trend, coming in at -$14.7 million while tobacco taxes were negative -0.8%. Alcoholic Beverages were positive at 4.3%.
FUEL TAXES STILL TRENDING DOWNWARD
November Fuel Taxes/Fees were down $1.3 million or a little less than 1%. There is no logical explanation why these fees, which include Impact Fees and a $5 per night Hotel/Motel fee, should be negative.
YEAR TO DATE REVENUES SERIOUSLY DEFICIENT
It is really very simple...after five months, the state has not only not matched or increased revenue collections of the same period of a year ago, but revenues have actually lost ground to the tune of $33.5 million or -0.3%.   So far this fiscal year, the state has collected $9.62 billion but a year ago at this time, collections totaled $9.65 billion.
Because the state's budget is based on growth, the state needs to take in about $70 million more each month just to meet this growth and obviously, it has not done that. In plain english, the state is over $300 million under budget for this year so far. Each month that goes by, that difference grows if that month is not a positive month.
YEAR TO DATE NUMBERS SO FAR ARE DREADFUL
Of course none of us knows what the remaining months of the fiscal year will bring. We are hopeful the state will start a positive growth spurt and by the end of the Fiscal Year in June will have gained the $600 million plus that is needed to fund the FY 2020 budget.  
INCOME TAXES NEGATIVE FOR THE YEAR AFTER 5 MONTHS
The Individual Income Tax category is down $44.4 million for the 5 month period so far or almost -1%. Corporate Income Taxes are also negative at -2.8%.
SALES TAXES MARGINALLY UP
November's positive Sale Tax collections improved and now stand at a positive 2.1% YTD. Title Ad Valorem Taxes are down $50.2 million YTD while Tobacco Taxes are negative at minus 3.7%. Alcoholic Beverages are up 5.1%.
FUEL TAXES/FEES INEXPLICABLY NEGATIVE YTD
No one seems to have a reason why the Fuel Tax/Fees category would be negative after 5 months. Actually the Impact Fee portion is actually up almost 10% and the Hotel/Motel Fees are also slightly positive, up 3%. The main decrease in in Fuel Excise Taxes, based on consumption, which are down about 4 tenths of one percent.
OTHER STATES CONTINUE TO OUTPACE GEORGIA
Revenue growth through November:
State
Year to Date
12 month trailing average
Texas
21.4%
16.0%
Alabama
6.9%
7.8%
Kentucky
3.9%
4.6%
Arkansas
3.8%
6.6%
Louisiana
1.2%
1.8%
Georgia
-0.3%
1.9%
West Virginia
-2.0%
5.9%
Revenue growth through October:
State
Year to Date
12 month trailing average
Virginia
8.5%
8.3%
Tennessee
7.7%
6.4%
South Carolina
6.2%
8.4%
Louisiana
4.9%
3.6%
Mississippi
4.8%   
5.6%
SO WHAT ACTIONS ARE CALLED FOR?
We have run out of room this week, so we'll wait to explore what options may be available.

I may be reached at

234 State Capitol, Atlanta , GA 30334

(404) 656-5038 (phone)

(404) 657-7094 (fax)

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Or Call Toll-Free at

1-800-367-3334 Day or Night

Reidsville office: (912) 557-3811