Revenue Increases Slowing?

Is it a blip or a rough patch?  At least the revenue numbers were an increase, even if only at roughly the rate of inflation.  From the Governor’s office:

Gov. Nathan Deal today announced that Georgia’s net tax collections for the month of May totaled $1.24 billion, an increase of $26 million or 2.1 percent compared to month-ended May 2011. Through 11 months of FY2012, total net revenue collections have eclipsed $14.5 billion year-to-date, which is an increase of $703 million or 5.1 percent compared to the last fiscal year.

“With only one exception, we’ve had positive year-over-year growth for more than 20 months,” said Deal. “Although these numbers are not as strong as April’s, they continue to maintain a steady pattern of growth.”

The following changes within the various tax categories led to the overall net revenue increase in May:

Individual Income Tax: Individual Income Tax collections for May 2012 totaled $617 million, down from $619.25 million in May 2011, for a decrease of $(2.25) million or -0.4 percent. The following notable components within Individual Income Tax account for the decrease:

•   Individual Withholding payments were up $42.5 million or 6.2 percent

•   Individual Income Tax refunds issued (net of voided checks) were up $38.5 million or 28.5 percent

•   All other Individual Tax categories including Return payments were down $(6.25) million or -8.3 percent

Sales and Use Tax: Net Sales and Use Tax collections for May 2012 totaled nearly $449 million, up from $432 million in May 2011, for an increase of $17 million or 3.9 percent. The monthly Sales Tax Distribution to local governments totaled $360.5 million, which was a decrease of almost $(8) million or -2.1 percent over last year.

Corporate Income Tax: Corporate Income Tax collections for May 2012 rose by $3.75 million or 85.4 percent, up from $4.25 million in May 2011. The following notable components within Corporate Income Tax make up the increase:

•   Corporate Tax refunds issued (net of voided checks) were down $(4) million or -17.0 percent

•   Corporate Estimated Tax payments were up $3.25 million or 15.4 percent

•   All other Corporate Tax categories combined for a decrease of $(3.5) million or -50.5 percent

6 comments

  1. ckingtruth says:

    I’m sorry, but with the unemployment rate, the housing market, and continued budget-cutting by cities and counties here in GA, I simply don’t believe the numbers. But who is going to do an independent audit of the State? Sorry, but I just feel that the books are being cooked, and have been for at least a couple of years.

  2. saltycracker says:

    Corporate income taxes were ?

    Contrary to ckgtruth, empirically, the Ga economy is probably doing better than indicated considering all the activity off the radar. Cash, internet, subsidies, fraud….Lots of jobs going unfilled also.

    The bigger questions may be to understand other revenue like from the feds, where revenue is going and what costs are going up.

  3. John Konop says:

    Globalization is why the stock market is not a great indicator for spending. Just because a stock does well it may mean the company has just expanded into a foreign market and hires people there not here. The biggest factors with spending (70% of the economy is spending) are gas prices and interest rates which are major factors in available cash per month in a household. If gas prices go down you will see spending go up. Spending going up it will help create jobs. This works until debt goes to high and or interest/ gas prices go up killing cash flow. We are caught in this dynamic via the lack of internal investment and the destruction of the middle class via globalization. Unless we start investing here and straighten out trade deals, we will keep seeing bust and boom cycles getting shorter and shorter. And this will create further division between rich and poor.

    That is why I think gas prices and interest rates are the biggest factors that will increase the economy short term , which drives tax revenue. Welcome to the roller coaster.

  4. Dave Bearse says:

    John, I recollect reading “panics” historically occur every 7-8 years, so it doesn’t appear the cycles are becoming any shorter. The troubling aspect is that the recoveries after the last two dips (2001 and 2008) have been slow and weak particularly with respect to employment.

    • John Konop says:

      The middle class wages and jobs declining for the last 30 years is the problem. The conspet that we can consume at irrational levels while producing less ie trade deficite, is an irrational business model for an economy. We have been maintaing this with irrational levels of debt personal and government. The only thing that keeps the game going is China cannot afford not to keep the game going.

      But at the end the longer we play the game the further you will see spread between rich and poor. This is why Henry Ford advocated for a high paid muddle class workers. He wanted them to make enough money to buy his cars. Bottom line 70 percent of our economy is based on spending and people have less money and credit. That is why gas prices are such a big factor in consumer spending. But long term it is about production over consumption………

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