Georgia tax revenue update

From Friday’s Atlanta Business Chronicle:

The Peach State’s tax revenue in April dropped 4.2 percent to $1.34 billion. That figure includes $450.6 million in sales tax revenue (up 12 percent), $91.6 million in corporate income tax (up 13.9 percent), $80.4 million in motor fuel tax revenue (up 29.9 percent), and $657.4 million in individual income tax revenue (down 16.4 percent).

Year-to-date through April, the state’s tax revenue sank 10.7 percent to $11.6 billion.

22 comments

  1. Icarus says:

    There’s a small silver lining here. Sales taxes and motor fuels taxes are leading indicators, while individual income taxes are more of a lagging indicator. Hopefully, the fact that folks are spending money and beginning to travel again shows that economic activity is starting to come back. Let’s hope individual incomes soon follow.

  2. John Konop says:

    Consumer spending is up which is I believe is from people having money via not paying bills ie home foreclosures, credit card bills……Which I think could stay fairly stable if not grow some if we have job growth. The dark cloud I see is the decrease in state employees ie teachers relative to the employment numbers. The key in the third and forth quarter is will Georgia grow more jobs than the layoffs.

    The key issues for long-mid term growth are the following in my opinion:

    1) Will the social conservatives kill the best job growth industry in the state ie CDC. We should be promoting and embracing companies doing embryonic research and products, not outlawing them! This would be real shot in the arm for the economy here in Georgia!

    2) Can we execute on a viable transportation plan?

    3) Will we fix the liabilities issues with state retirement plan?

    4) Will we fix the education system?

    5) Will we charge more user fess to offset the real cost of services?

    6) Will the state embrace self-insurance to save money?

    I am sure I am missing a few other key issues.

  3. Lady Thinker says:

    Revenue percentage lagging is nearly the same as the unemployment percentage. If Georgia could create public and private jobs for the same percentage range, the two could cancel each other out. Revenues could go up 10% and enemployment could go down 10%,

  4. Technocrat says:

    Just in time to only require another [2 at most] Billion Cut in next years budget to make up Fed Funds Stimulus losses.

  5. So sales taxes and fuel taxes combined bring in $531M.

    Corporate and individual income taxes bring in $749M.

    Since we apparently need roughly $1.28B, couldn’t we just raise the sales / fuel taxes to roughly 240% to 245% of their current levels and do away with the income tax in Georgia altogether? Wouldn’t that in and of itself create a savings for Georgia’s budget?

      • What about unemployment rates? Do we really have that many state employees collecting income tax? Would we not possibly need them in the areas of state sales tax collections? I’m just throwing out questions here because I haven’t done the in-depth research to know how large that division of our state government is, so I’d really kind of like to know if someone has the numbers…

    • John Konop says:

      David Staples,

      The problem is that if we did that you are not factoring behavior. It would more than likely decrease usage via less driving. Also it would increase product cost which would result in fewer sales in the state epically in boarder areas. And that would result in less revenue and more unemployment.

      • It could decrease usage. Then again, if people had the extra money from their paychecks, as it’s not being taken out automatically, it should even out, right? I spend roughly $600 a month on fuel, so certainly, I’m going to feel it if the taxes go up on it by that percentage. But I’m not talking about raising the total price.. just the tax percentage.

        • John Konop says:

          David Staples,

          If you buy products out of state via price than it would hurt the state economy, this has created black-markets in the past with boarder states with cigarettes, spirits…..

          • Do you really think it would have that much of an impact? Seriously? Both Floriday and Tennessee are without income taxes… why can’t Georgia make it work too?

            • errm… Floriday being the state to our south… Florida. Didn’t mean to give it a new day of the week. Perhaps Floriday is the day everyone goes to Florida to purchase their alcohol on Sundays from the grocery stores.

            • John Konop says:

              David,

              The problem with fuel taxes is they have a major impact on prices ie transportation cost. If your goal is to change behavior via transportation ,taxes have been affective. But it is not affective if the goal is revenue.

              I would suggest a hybrid with a lower income tax and a small transaction tax. That would less likely affect cross boarder sales and increase tax revenues via black-market sales being taxed.

              • Perhaps it may not be affective, but it could be effective.

                If you’re going to just lower the income tax, you’ve still got all the infrastructure in place that goes with the collection and enforcement of that tax. That’s why I was suggesting the removal of the income tax altogether.

                I don’t think I can sell the people who board their horses with us. *Border* sales on the other hand, would probably change a little bit, but probably not as much as you’re speculating.

        • ByteMe says:

          David,

          As shown during Katrina/Rita’s explosion in gas prices, there is a moment in the price curve where people will question their sanity about a particular expense, even if they save money elsewhere. It seems that point is between $3.50/ and $4.00/gallon. During recessions, sales taxes also go down more than income taxes, so changing the income tax to a sales tax will just further decrease the tax revenue received by the state.

              • I figured roads would be one of the primary excuses. I’ll concede funding roads with taxpayer dollars. But not boat ramps, sports stadiums, etc. Perhaps our legislators could take a course on learning what the difference between a want and a need is.

  6. hewhoone says:

    So Georgians are paying more in consumption taxes while their incomes have been reduced by 16%. Sounds like bad news all around.

Comments are closed.