State tax revenues hold steady

November 12, 2008 17:28 pm

by Pete Randall · 9 comments

Huh.

Income tax collections were down, and sales tax collections were up in October. The two are major indicators of the state of the economy and provide most of the state government’s revenue.

Collections were up in September, so budget-writers facing a $1.6 billion to $1.8 billion shortfall are at least seeing some stabilization of collections after several months of declines.

Overall collections were down a miniscule 0.1 percent in October, or a little more than $1.1 million.

For the first four months of the fiscal year, collections are still down 2 percent, or almost $111 million. The state’s fiscal year began July 1.

John Konop November 13, 2008 at 7:48 am

The relevant number is State tax revenues vs. population. The reason we are in the red is because our tax revenue did not grow at the same rate it cost to service the new population.

As I warned years ago your servicing cost will overwhelm your tax revenues. You can only play roll over economics in a growth mode, but a slow down shows the lack of financial controls.

The real debate which both sides are avoiding is how to reform servicing cost of tax payers.

Why not look at how we lower cost by merging redundant agencies?

Why not look at reforming poorly failed thought-out mandates like MATH 123 that drive cost up and lower quality?

Why nor cross utilize vocational colleges and 4 year Universities with High Schools to increase quality and lower labor and building cost?

I could go and on……

Chris November 13, 2008 at 8:09 am

I think the taxpayers are getting “serviced” enough as it is.

Bucky Plyler November 13, 2008 at 8:49 am

If the economy is bad then why are sales tax collections up?

John Konop November 13, 2008 at 9:17 am

Bucky up or down is irrelevant. The number that is relevant is revenue per person. If you have more people and the revenue per person is down that is bad. If you have less people and your per person is up that could be good.

Gross and net are to different concepts.

John Konop November 13, 2008 at 9:34 am

Sorry

two not to

Bucky Plyler November 13, 2008 at 9:51 am

Income tax collections are down. The primary reason may be that folks are not paying up – not that their income is down. In fact, personal income has increased in GA just as it hs nationwide.

Sales tax revenue is a good indicator of how income is being spent. So, it appears that there is money out there. How much is credit spending is another subject.

I agree w/ you that gov’t can always be more cost effective in it’s services. Particularly, if it is forced to do so. I believe that one thing that forces it to do so is when it receives less revenue.

Chris November 13, 2008 at 9:58 am

A 2.7 percent increase in gross sales tax collections. However, while the state collected the money in October, most of the sales were actually made in September before the worst of the national financial crisis hit. Gross sales tax collections in October were about what they were in October 2006

Looks like the sales tax revenue being up was due to spending that occurred prior to George Bush telling the work the sky was falling which caused the sky and markets to fall. I would expect the numbers for November to look really bad.

John Konop November 13, 2008 at 10:20 am

Bucky Plyler

The other factor is what type of workers and industries you are attracting to Georgia. Low wage workers take more in service cost than they pay in taxes.

Bucky Plyler November 13, 2008 at 10:38 am

I agree John. I don’t know the figures on how much low wage workers weigh in on the bottom line. I think it’s significant in urban areas, & I know it impacts rural areas that have alot of poultry & labor intensive ag.

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