senator jack hill 4 th district georgia moving forward 1 updated september 10, 2015
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Senator Jack Hill4th District
Georgia Moving Forward
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Updated September 10, 2015
Department of Revenue Collections FY06-FY16
2*Only compares revenues collected and reported by the Department of Revenue (primarily tax revenue). Other agency collections, such as insurance premium taxes, are not included.
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Gen Est.
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$16,247,043
$17,639,827 $17,497,748
$15,625,305
$14,317,390 $15,332,989
$16,079,762 $17,024,135
$17,883,554 $19,028,524 $19,368,075
Revenue Estimate ComparisonFY2016 is built on approx. 1.7% TAX growth over FY15 and 8% over FY14
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FY11 Actuals FY12 Actuals FY13 Actuals FY14 Actuals FY 15 Actuals* FY 16 Gen Est. $-
$5,000
$10,000
$15,000
$20,000
$25,000
$15,333 $16,080 $17,024 $17,884 $19,029 $19,368
$2,747 $2,470 $2,731
$2,582 $2,644 $2,461
DOR Tax Revenue All Other Collections (Lottery, Insurance Premium Taxes, Tobacco, etc)
Mill
ions
*FY15 is based on unaudited numbers and subject to change
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Trends in Dept. of Revenue Collections
• With tax collections unaudited, a few trends…1. Total State tax revenues show $19.0 billion with
a gain of over $1.1B YOY.2. Individual Income taxes, half of state tax
revenue, was strong with a 7.9% increase on revenues of $9.67 billion, or $711.8 million of the YOY gain.
3. Sales tax was consistent at 5% and followed the southern trend
4. Revenues were over budget $500M+
12 Month Trailing Growth Rate – through July
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-17.0%
-12.0%
-7.0%
-2.0%
3.0%
8.0%7.8%
-1.1%
-4.3%
-10.5%
-15.9%
-9.1%
2.2%
7.8%
3.6%
5.9% 6.4%
State Funds Budget Declines during the Recession
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $15,000,000,000
$16,000,000,000
$17,000,000,000
$18,000,000,000
$19,000,000,000
$20,000,000,000
$21,000,000,000
$22,000,000,000 During the recession, nearly $3.5 Billion was reduced out of the state funds budget in 10 from the peak
20002001
20022003
20042005
20062007
20082009
20102011
20122013
2014
2015 Estimated
$-
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
$1,600,000,000
$1,800,000,000
$2,000,000,000
Revenue Shortfall Reserve (RSR)
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From 2002 to
2004 the State
utilized $1.6
billion of the RSR
From 2008 to
2010 the State
utilized $1.5
billion of the RSR
*Before K-12 RSR removed
Formula Funded Areas FY08-FY15
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*Latest available – as of July 1, 2014**Estimate based on Summer, Fall Spring enrollment^Department estimates on actual through April 2015, projected through June
2008
2015% Change
08-15 Difference
Georgia Population 9,697,838 10,097,343* 4.12% 399,505 Education
K-12 FTEs 1,627,660 1,723,663 5.90% 96,003 Regents FTEs 235,186 276,564 17.59% 41,378 TCSG FTEs 73,897 70,906** -4.05% -2,991 Health Medicaid Enrollees 1,268,682 1,810,087^ 42.37% 448,070 PeachCare Enrollees 252,068 158,733^ -37.03% Corrections Inmates 59,795 53,870 -9.91% -5,925 Probationers 142,663 166,380 16.62% 23,717
Georgia vs Other States
• Georgia is doing very well in comparison to other SE states
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FY20
15 F
inal
July
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
6.4% 6.4%
3.7%4.3%
7.8% 8.2%
3.1%2.3%
0.0728777429367466
5.7% 5.3%
2.9%1.8%
-0.1%-1.0%
12 Month Trailing Growth Rate: Selected Southeastern States
Georgia Alabama Tennessee TexasSouth Carolina Florida Mississippi Louisiana
GA
AL TN TX SC FL MS LA GA AL TN TX SC FL MS LA
*Based on only Department of Revenue collections except Florida, which has additional fees or adjustments outside of Department of Revenue.
Georgia’s Budget Process is Sound
• With the Senate, House and Governor Deal’s leadership, Georgia was one of the first in the SE to pass a budget
• Other SE states suffer from late budgets including Alabama, North Carolina, Florida
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AL.com August 25, 2015
Tallahassee Democrat June 20, 2015
News & Observer August 30, 2015
Other States Fight Problems
• Alabama’s separate Education budget and Medicaid expenses taking a larger share of the General budget revenue sources
• Florida struggles with healthcare funding• Louisiana budget impacted by oil price drop• North Carolina revenue volatility, spending
disagreements
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North Carolina – from their May 6 Revenue Adjustment
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North Carolina’s tax changes got news, but their Consensus Forecast points out the higher revenue was linked to business filings and possibly the repeal of an exemption.
Reason for Optimism
• July revenues were up 6.1%– Individual income taxes were up 9.0% or $69M,
withholding payments were up $61.3M• In July, the seasonally adjusted employment
rate was lowest in 7 years
• Other AAA states: Alaska, Delaware, Iowa, Maryland, Missouri, North Carolina, Texas, Utah, Virginia
• KY downgraded for pension concerns13
ISSUES: OPEB
• OPEB is the liability the state has for retiree medical and other post-employment benefits
• Currently financing generally on a Pay As You Go basis
• State OPEB Liability: $2.87 Billion• School OPEB Liability: $8.51 Billion
• In AFY15 and FY16G, funds were instructed to be transferred to the OPEB trust ($187M and $115M)
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Why OPEB?
• Covering long term liabilities key to strong bond ratings
• The most recent report has the annual required contribution for the liability at:– School: $669.9M– State: $202.1M
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ISSUES
• Pay Raises • Effects of the Transportation Bill• Medicaid costs (Hepatitis C, enrollment)
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Questions?
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