revenue sharing by elaine smith arizona department of revenue office of economic research and...
TRANSCRIPT
Revenue Sharing
By Elaine SmithArizona Department of Revenue
Office of Economic Research and AnalysisAugust 5, 2015
Revenue Sharing to Cities and Counties
Components of the Revenue Sharing Bases
Trends for Revenue Sharing Special Census
Revenue Sharing to Cities and Counties
For FY16, the official Estimate of Revenue Sharing to cities is:
TPT: $ 480 million ($121 per capita)
URS: $ 605 million ($96 per capita)
Note: The population used is the 2010 Decennial Census. The URS is subject to a minimum population of 1,500.
Revenue Sharing to Cities and Counties
For FY16, the official Estimate of Revenue Sharing to counties is:
TPT: $780 million ($155 per capita)
Note: The population used is the 2010 Decennial Census.
Components of Revenue Sharing
What makes up the pool of money that is shared with the counties and the cities?
Components of TPT Revenue Sharing
Using the Retail category as an example,
the current state tax rate for retail is 5.6%. Of that:
2% goes to the Distribution Base pool
3% is Non-shared 0.6% goes to Education Tax
Components of TPT Revenue Sharing
Of the Distribution Base, 25% goes to the Cities 40.51% goes to the Counties 34.49% goes to the state general
fund
Components of TPT Revenue Sharing
The percentage each category contributes to the Distribution Base differs. For the larger contributors:
Utilities, Communications and Contracting contribute 1% to the Distribution Base.
Restaurants & Bars, Amusements, Retail, Personal Property Rentals contribute 2% to the Distribution Base.
Components of TPT Revenue Sharing
Mining Severance contributes 2% of it’s 2.5% rate to the Distribution Base.
Hotel/Motel contributes 2.75% to the Distribution Base.
Components of TPT Revenue Sharing
Of course, the volume of activity in each category factored by the percentage contributing to the Distribution Base is ultimately what dictates the pool of money available for revenue sharing to cities, towns and counties
FY16 TPT Revenue Sharing Components
Contracting
Printing
Rental of Personal Property
Retail
Amusements
Communications
Restaurant & Bar
Transient Lodging
Utilities
Other
Components of TPT Revenue Sharing
In FY15, the Retail category component comprised 63.7% of the Distribution Base pool. In FY05 it was 61.6%; in FY10 it was 60.1%. It is safe to say that the Retail category is, and will continue to be the largest contributor to the Distribution Base Pool.
Components of TPT Revenue Sharing
In FY15, the Contracting category component comprised 5.8% of the Distribution Base pool. In FY05 it was 10.6% and in FY10 it was 6.5%.
It is safe to say that the Contracting category has diminished it’s role as a strong contributor to the Distribution Base pool.
Components of TPT Revenue Sharing
The other strong contributors to the Distribution Base during FY15:
Utilities 5.37% Restaurant & Bars 13.3% Rental of Personal Property 3.76% Hotel/Motel 4.01%
Components of Urban Revenue Sharing
Urban Revenue Sharing (URS) is comprised of 15% of the Net* Income Tax collections from two years prior.
So, for FY16, the URS base is the net income tax collections from FY14.
The income tax collections from FY16 will be distributed in FY18.
*after refunds
Percentage1974-1993 1972-1991 15.00%
1993 1991 12.80% $183,667,152 1994 1992 12.80% $185,405,279 1995 1993 12.80% $205,607,060 1996 1994 12.80% $218,543,272 1997 1995 13.60% $257,800,548 1998 1996 15.00% $291,243,578 1999 1997 15.00% $340,310,656 2000 1998 15.80% $377,710,988 2001 1999 15.00% $396,452,640 2002 2000 15.00% $421,876,573 2003 2001 $430,559,053 2004 2002 14.8% / 15.0% $365,065,158 2005 2003 15.00% $373,072,580 2006 2004 15.00% $425,228,927 2007 2005 15.00% $551,230,661 2008 2006 15.00% $684,538,927 2009 2007 Appropriation of
$727.68m$727,677,400
2010 2008 15.00% $628,644,630 2011 2009 15.00% $474,006,520 2012 2010 15.00% $424,423,442 2014 2012 15.00% $513,584,045 2015 2013 15.00% $561,001,195 2016 2014 15.00% $605,634,332
Distribution Year-fiscal
Collection Year-fiscal
Distribution
Urban Revenue Sharing History
Components of Urban Revenue Sharing
Components of Net Income Tax Revenue
Source FY05 FY10 FY15
Withholding 73.9% 106% 83.5%
Individual* 6.2% (20.6%) 1.4%
Net Individual 80.2% 85.4% 84.9%
Corporate 19.8% 14.6% 15.1%
*final payments minus refunds
Components of Urban Revenue Sharing
What to watch to in order to anticipate Urban Revenue Sharing?
Withholding Corporate Credits
Components of Urban Revenue SharingThe impact of credits on Urban Revenue Sharing:
Tax Year Corp Credit
Individual
Total Reduction in URS
2006 $109 m $286 m $373 m $56 m
2007 $108 m $265 m $356 m $53 m
2008 $73 m $247 m $328 m $49 m
2009 $55 m $244 m $299 m $45 m
2010 $88 m $253 m $341 m $51 m
2011 $116 m $263 m $379 m $57 m
2012 $115 m $285 m $400 m $60 mData from all tax years is subject to change.
Forecasts for Revenue Sharing
TPT for FY17 Cities $515 m Counties $835 m
URS for FY17
Impact of Special Census on Revenue Sharing
By statute we use the decennial census counts starting July 1 in years ending in 1. 1991, 2001, 2011 for example.
Permanently in statute is the option for a jurisdiction to conduct a Special Census with the new counts to be used starting July 1 in years ending in 6. 1996, 2006 and 2016 for example.
Impact of Special Census on Revenue Sharing In prior mid decade periods, (1995 and
2005 at least) temporary statutes were enacted to allow the use of counts determined using other methods in place of a full blown Special Census. Those alternative methods were either free or at least less expensive than a full blown Special Census.
For 2015, no such legislation is currently in place.
Impact of Special Census on Revenue Sharing
We understand that the following cities have contracted for a 2015 Special Census:
Gilbert Peoria Chandler Buckeye Maricopa Queen Creek Goodyear
Questions?
Contact Information
Contact Information Elaine Smith – Senior Economist
Arizona Department of RevenueOffice of Economic Research & Analysis
Email: [email protected]: 602-716-6924
Additional Contact Information
Department of Revenue website: www.azdor.gov
County and city revenue sharing: Elaine Smith [email protected]; Karen Jacobs [email protected]
Program Cities: Cities Unit [email protected]
TPT Licenses: DOR License and Registration www.azdor.gov
Additional Contact Information Tax base estimates: Elaine Smith
[email protected] ; Levy Limits: Darlene Teller dteller
@azdor.gov Expenditure Limits: Karen Jacobs
Additional Contact Information
Bonded Indebtedness This has been taken over by the State
Treasurer’s Office
Additional Contact Information
License Compliance Services: Peggy Creamer [email protected]
Property tax services: Property Tax Division 602-716-6843