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Not a Good November
Monday, 17 December 2012

December 17--  State Senator Jack Hill of Reidsville reports some sobering numbers regarding state revenue in November.

NOVEMBER COLLECTIONS NEGATIVE-SALES TAXES LAG

State Revenues were negative for November showing a 0.7% decline on total collections of $1.3 billion, the first negative month since December of 2011.  While only declining $9 million, the fact that revenues have been growing at a declining rate for the past year was highlighted by Year To Date Total Revenue Growth slipping under 4% to 3.7%.

 

Individual Income Taxes grew 3.3% or only $22.2 million on total collections of $701.4 million.  Individual Withholding payments were up 4.3% as were estimated payments, and net refunds were down by -10.3% and the number of refunds was down as well.

 

For the month Net Sales Taxes for the state portion declined by -3.6% on collections of $435.0 million, a $16.1 million decline.

 

Motor Fuel Taxes increased slightly by 0.4%.  Excise taxes were down by 0.3%.  Motor Fuel Sales Taxes were up slightly at 0.8%.  This is a little tricky, but since the sales tax has been frozen at 12.1 cents per gallon and did not go up this summer with the price of fuel, only previously unidentified Motor Fuel Payments being posted accounted for the slight increase where it would have been negative otherwise.

 

Corporate Tax collections for the month were negative compared to last November showing a negative -$20.0 million drop.  Tobacco and Alcoholic Beverages which are being adjusted compared to a year ago were positive for the month.

 

November of 2011 was a really good month whereas December and January were not.   With Christmas shopping appearing to rebound this year, the next two months have a good chance of showing growth.

 

YEAR TO DATE REVENUE TOTAL SLIPS TO 3.7%

Since the first quarter of FY2012 a year ago which showed a 7.2% increase, state revenues have continued a general slide downward with quarters of 3.4%, 3.4%, 5.3% in FY2012 and 4.3% for the first quarter of FY2013.  With October and November added in, the cumulative growth rate for this fiscal year through 5 months is only 3.7%, the lowest it has been since June 2010.

 

YEAR TO DATE NUMBERS

Individual Income Taxes are up only 3.9% through November on collections of $3.6 billion and a gain of only $137.9 million.  This is, of course, the state's largest category, accounting for about 50% of revenue collections.

 

Gross Sales Tax collections for the year only show a 0.7% increase while net collections to the state are up only 1.4%.  Within that category, sales tax areas which are negative include Home Furnishing at -0.9%, Manufacturing, -2.3%, Retail Trade, -2.2% and Utilities/Energy -8.5% or some $41.2 million YTD.

 

Year To Date Motor Fuel Taxes are down 3.9% with both sales taxes and excise taxes showing declines.

 

Corporate Tax collections are positive for the year, showing a gain of $68.6 million.  Corporate refunds were down -$33.7 million and corporate estimated payments were up $52.7 million or 35.5%.  The number of refunds, though, were up YTD.

 

Tobacco and Alcoholic Beverages are up slightly YTD at 2.0% and 0.4% respectively.

 

So, after 5 months of FY2013, state revenues are up by $249.4 million on a total collection of $6.9 billion.  To have met the budget passed by the Legislature for 2013, revenues would need to increase by some $800 million or 5% by June 30, 2013.  December and January have been make or break months over the past few years and are critical this year.

 

THE NEWTOWN TRAGEDY

No one who saw their child, grandchild or anybody's child this weekend could stop from thinking about the horrific slaying of the 20 children and 6 adults at Newtown, Connecticut on Friday.  Children of primary age are so precious and just as I have said about my grandchildren: pure pleasure.  It is difficult to watch TV with parents and friends talking about the children and not just feel the most intense pain and sorrow. Maybe it will cause us all to redouble our efforts to make every child's future secure, safe and successful.

 

 

 
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