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Notes from the Senate
Saturday, 19 June 2010

STATE UNABLE TO MEET 010 REVENUE TARGETS

June 19--  State Senator Jack Hill of Reidsville provides his weekly column "Notes from the Senate."

"When leaders took a look at the May state revenues-down 6% or $75 million- one thing was obvious:  the state is not meeting revenue targets that the 2010 budget was based upon and potentially, there is an additional problem in FY 2011 that could run several hundred million dollars.

May's revenues came in at a paltry $1.18 billion or about $75 million under May of 2009.  The state is now undershooting the FY2010 budget by about $100 million or the total amount of the small state reserve fund left, about $103 million.

The larger than last year refunds being paid out by the Revenue department certainly play a role in the revenue picture for the last month of FY2010.  As we bear down on the last month of the fiscal year, several facts are clear:

  1. There are essentially two choices of funds to make up the shortfall expected of $100-$200 million.  Using the $103 m RSR and moving forward federal stimulus funds that are appropriated in the FY2011 budget.  There is a total of about $291 million of those funds in the 011 budget as passed.  So those funds or the part needed could be moved forward.
  1. Moving funds forward that are already appropriated is problematical and creates a hole twice that big in the FY011 budget.  First taking them from the 011 budget leaves a hole and then there is another hole created when the FY010 budget misses its target and the 011 starts off at a deficit--a double whammy as last year demonstrated.
  1. Every tax refund that is pushed into FY2011, will take away from revenue in the 011 budget adopted this past session.  Additionally, if the built in revenue growth does not materialize, that creates an additional $600 million hole.

But, back on May revenues, there were a few bright spots which demonstrate some stabilization.  Individual Income Taxes are down 6.5% better than 11.8% YTD.  Net Sales taxes, or that going to the state, are down 7.8%, which is certainly better than the minus 10.7% that category shows for the 2010 fiscal year through 11 months.  

Both fuel tax totals were up, excise taxes at 5.1%, $1.97 million and fuel sales taxes, up $15.9 million or 70.8%.  Alcohol beverage sales taxes showed a strong month, growing at 16.6%.

PART TWO--THE GOVERNOR'S VETOES

SB 239 - required timely enrollment of school children after a family move.  The Governor objected to a floor amendment that intended to safeguard homeschooling families but in fact might have required more registration by those families.

HB 1251 - would have allowed for sales tax breaks for large tourism projects of $100 m or larger.  The Governor objected to a blanket waiver of sales taxes that could provide up to a 25% cost offset.  He asserted that the state has approved projects for different credits and exemptions on a case by case basis in the past.

HB 1321 - would have expanded the permissible purposes for which 911 fees could be used.

SB 373 - mandated that private employers turn over employment history records to law enforcement agencies who are considering potential employees or for recertification.   The Governor maintained that it was intrusive on private employers and left a possible liability question.

HB 1272 - adds to state tax forms a check box for individual taxpayers to direct their tax refund to lupus, kidney disease and multiple sclerosis research.  The Governor asserted that the legislation did not identify which organizations would receive the funds and could be expensive to administrate.  He noted that there are now 8 other options on the form for deserving charities.

SB 291 - would have allowed gun permit holders to carry weapons inside airport terminals in the public, non-secure areas.

HB 1028 - Allowed landowners whose lands are in a conservation use covenant to subdivide that land to avoid paying penalties.  The Governor maintained that this change circumvents the original intent of the covenants.

HB 1082 - created a new type of “Freeport” exemption available to local governments applying to retailers.  The Governor believed that this exemption would be detrimental and competitive reducing local tax bases.

Other Vetoes You Might Want to Look Up:  HB 1236, HB 417, HB 990, HB 907,

HB 321, SB 415.  Find these at:  www.legis.ga.gov, Senate Research, Session Highlights, Vetoes listed on Page 69.  

Next Week:  The Governor's Appropriations vetoes and language

 
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