Georgia’s state tax revenues were up 2.1 percent in May from May 2011. We’ll probably end fiscal year 2012 with a 5 percent increase over FY 2011.
These are pretty soft numbers. The total from individual income tax collections in Georgia was down .4 percent last month compared to a year ago, and gross sales and use tax collection was up only 1.8 percent, less than the pace of inflation. Alan Essig of the Georgia Budget & Policy Institute notes that the growth is insufficient fot fund reserves. Rockefeller Institute data shows that state revenues across the country are generally increasing but that the pace of increase has clearly slowed from a year ago.
But we have fallen into a regrettable habit of judging current economic activity (state revenue is a good barometer) by comparing pretty weak years to even weaker ones.
In May 2006 (six years ago!), Georgia’s gross sales and use tax was $946,473,000. After adjustments and distributions to local municipalities, the state ended up with $509,680,000. In May 2012, the gross collection was $821,996,000, and the state’s net collection was $448,739,000.
That suggests a decline in sales activity in the state of 12 percent or so over the last six years. Adjusted for inflation, the decline is more than 20 percent. Through May of FY 2007, Georgia had almost $16 billion in revenues. Through May of FY 2012, the state has about $14.5 billion in revenues.
These are clear signs of a statewide economy still lagging far behind its pre-recession level.
I give state leaders real credit for minimizing the impacts of the resultant budget cuts to some degree, but these steep declines raise all sorts of questions about funding for education, infrastructure, and other state functions.
I doubt any of the transportation tax proponents will make it a particular point of emphasis, but there’s certainly an argument to be made that the new sales taxes would be one way of making up for a huge amount of lost ground.