State revenues up in July, but plenty of room for worry in the numbers

Today’s press release details Georgia’s net tax collections of $1.32 billion in July, up $91 million (7.4 percent) from July 2011.

That headline number is pretty good, but some of the details aren’t so encouraging.

Individual income tax revenues rose 6.3 percent year-over-year to about $698 million, which indicates higher aggregate wages in the state. But gross sales tax collections increased only 0.9 percent to about $860 million. After sales tax distributions to local municipalities and other adjustments, the total was up a modest 3.1 percent year-over-year.

In the first post-T-SPLOST tax collections report, motor fuel taxes fell from about $85.6 million in July 2011 to $80.1 million in July 2012.

In July 2011, the state actually refunded more tax money back to corporations than it collected in revenue. This year, that $24.1 million loss turned into a $17.9 million net gain in tax collections.

Click here for the entire press release and to look at all the data.

Last month’s collections were just slightly above July 2007. In that month, individual income tax collections totaled about $609 million (well below this year’s total) while gross sales tax collections totaled $946 million (10 percent higher than this year’s total).

3 comments

  1. Dave Bearse says:

    Raw numbers are necessarily the bedrock of comparitive analysis. A snapshot based on raw monthly numbers can be decieving when the numbers aren’t normalized for variation though.

    Consider that July 2011 had five Fridays, and July 2012 only four. July 2011 thus had an extra payday for many people. If income taxes are promptly remitted and accounted for by the state, the true year to year increase is greater than 6.3%, because 2012 had four paydays, and 2011 five. If there’s reliably a couple / few days delay in receipt or state accounting, the true increase 2011 to 2012 is less than 6.3%, or conceivably negative. (In this case five payday’s worth of taxes flowed into four payday July 2012 because of accounting / delay.) This is one reason why quarterly comparisons are better, all or nearly all quarters have 13 weeks / paydays, smoothly out much monthly variation.

    I’d appreciate schooling as to adjustments for variation, if any, being used by Georgia government in providing snapshots, if anyone knowledgable cares to comment.

    • Bill Dawers says:

      Well I was hoping to login this morning to see a good answer to your questions, Dave Bearse.

      I fear that it’s pretty much impossible to adjust for all the possible variations in timing and in policy (depositing checks, issuing refunds, etc.) when it comes to individual income taxes on a month to month basis. I absolutely agree that looking at several months worth of that data is the best way to go. For example, April 2012 saw a 13% yoy gain in individual income tax revenue, but May and June were essentially flat. The timing of the weekends, of holidays, etc., can obviously play a role and going forward I’ll try to spot check the number of Fridays and see if there’s any obvious correlation.

      Net sales taxes are also very noisy despite the clear seasonal patterns to retail sales. The disbursements to local governments have a significant lag and are hard to adjust for, which is why I like to look at gross sales and use tax for a sense of the state of the economy, although that gets shaken up occasionally by the initiation or termination of SPLOSTs, the sales tax holidays, etc.

      These revenue numbers from the state are not adjusted at all, as far as I know. The Department of Labor’s statewide numbers are adjusted for seasonality, although they do release the raw numbers too.

      • Dave Bearse says:

        It’s unnecessary to adjust for all possible variations. My guess is that state government doesn’t think it worth the effort to develop adjustments, even though a very few would be needed to smooth out most of the variation. Even something a simple as a three month rolling average would probably smooth out a lot of noise.

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