Sometimes July, the first month of the 2016 fiscal year, can start off with a whimper. In some years, refunds might have been delayed for cash flow purposes or maybe it’s the summer doldrums, but we never seem to have high expectations for July’s revenues.
That is why 6.1 percent growth is a pleasant surprise for the month. Another reason is the changes brought about by HB 170, the transportation bill. Starting this month, that 1 percent sales tax on fuel that had been going into the treasury will be redirected to DOT under
the new all excise tax on fuel. Hard to tell for sure if this month has any effects or not since sales tax reports run a month behind.
But you should see an increase in motor fuel taxes both from the slight increase in net excise tax and the addition of the sales tax that has previously gone to the treasury. That’s about a $150 million item for the year.
The new fees now shown separately, like hotel/motel fees and highway impact fees will be shown separately and will be appropriated when the Legislature passes the amended FY16 budget.
July income taxes strong
The individual income taxes category, representing personal and small business income tax withholdings was very strong in July, raising $838.5 million or an increase of 9 percent. Individual income tax collections were up for the month 7.7 percent as well as individual income tax return payments, up $4.2 million.
Refunds were up 5.6 percent, or $3.5 million. Corporate income taxes were negative at -16.2 percent but only -$4.3 million in actual dollars. Corporate taxes tend to balance out on a quarterly basis. Corporate payments were down $4.6 million and refunds were up $5.1 million.
Sales taxes strong at 4.5 percent
Not clear if the 1 percent motor fuel tax previously going to the treasury is being shown yet because the net sales tax growth of 4.5 percent is very positive for the month, totaling $472.0 million growing $20.4 million.
Motor fuel now all excise taxes
Apparently the new motor fuel tax collection of all excise tax has taken effect since that is all that is being reported under the motor fuel category for July. The total, $90 million approximates what the category took in in May at $89 million and June at $86.7 million. That amount could increase at least $30 million per month.
“Sin taxes” both up for the month
Tobacco taxes were up 10 percent in July as was alcoholic beverages at 5.8 percent.
New fees start to show up on report
The new category “Motor Vehicle Revenues” began in July and included some old, existing fees and some of the new fees under HB 170. “Highway Impact Fees” showed $629,000 for the month.
The existing tag/title fee was slightly negative at -2.1 percent, but the title ad valorem tax was up $8.9 million or 13.4 percent, for a total for the month of $105.7 million, an increase of $8.9 million or 9.3 percent.
The new “hotel/motel” fee took in only $16,000 for July.
Growth stays steady
July’s revenue total of $1.57 billion gained some $90.9 million for the 6.1 percent growth rate, a strong start to the fiscal year. Additionally after one month, state revenues are $12 million ahead of budget for the first month. The 12-month trailing average continues strong at 6.4 percent.
Other states still trail Georgia after July — Texas, 2.3 percent; Alabama, 4.3 percent; and Louisiana, 1 percent, of those currently reporting. We will publish other states’ reports as they come in.
It will be interesting to see the effects of HB 170 on the general treasury as well as the increases that transportation should expect to realize.
I may be reached at
234 State Capitol, Atlanta, GA 30334
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(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
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