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Georgia’s Revenue Outlook

Georgia’s Revenue Outlook. Joint Appropriations Committees January 19, 2010. Ken Heaghney Office of Planning & Budget Georgia State University – Fiscal Research Center. Agenda. FY 2010 YTD Revenue Performance Economic Outlook Revenue Estimates – Amended FY 2010 & FY 2011.

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Georgia’s Revenue Outlook

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  1. Georgia’s Revenue Outlook Joint Appropriations Committees January 19, 2010 Ken Heaghney Office of Planning & Budget Georgia State University – Fiscal Research Center

  2. Agenda • FY 2010 YTD Revenue Performance • Economic Outlook • Revenue Estimates – Amended FY 2010 & FY 2011

  3. Individual Income Tax: YTD Growth Equals -11.5% • High volume of refund payments has had major impact; increase in refunds paid reduced YTD performance from -5.6% to -11.5%

  4. Sales Tax: YTD Growth Equals -16.2%

  5. Corporate Income Tax: YTD Growth Equals -24.4%

  6. YTD DOR Revenue Growth = -13.7%

  7. Agenda • FY 2009 YTD Revenue Performance • Economic Outlook • Revenue Estimate – Amended FY 2010 & FY 2011

  8. US Economy has Begun to Grow and Georgia’s Economy is Stabilizing • US GDP grew in the 3rd quarter of 2009 and is expected to post a stronger performance in the 4th quarter. • Housing markets have improved with sales up and inventory down • Consumer spending has begun to show signs of life • Labor markets have not yet turned the corner to sustained growth

  9. Real GDP Grew 2.2% in the 3rd Quarter

  10. Housing Sales Have Improved

  11. Inventory for Sale is Down

  12. Home Prices have Regained Some Traction Foreclosures still pose a risk to recovery

  13. Consumer Spending is Showing Signs of Life

  14. Auto Sales Growth has Persisted After The Cash for Clunkers Program

  15. Labor Markets are Healing but have not Turned the Corner to Sustained Growth

  16. Georgia’s Labor Market is Also Stabilizing

  17. Economic Scenario US economy has turned the corner to growth but recovery will be slow – it is a long way back to the prior peak End of the inventory drawdown and output increase in manufacturing are helping boost economic performance Job growth is expected to resume before the end of FY 2010 – this will help sustain modest improvement in consumer spending

  18. Agenda • FY 2008 YTD Revenue Performance • Economic Outlook • Revenue Estimate – Amended FY 2009 & FY 2010

  19. Amended FY 2010 Key Points: Motor fuel prepaid rate re-set on Jan. 1 2010. The new rate for gasoline is 9.44 cents per gallon vs. 5.66 cents per gallon on Jan 1, 2009, an increase of over 65% Super Speeder fine took affect Jan. 1 and is expected to add $23 million to revenue Second half performance is expected to benefit from weak benchmarks for comparison and economic stabilization.

  20. FY 2011 Key Points Economic recovery is expected to strengthen in FY 2011 Revenue growth is boosted by proposed new fees. General Fund revenue growth absent these fees is expected to be about 3.6%

  21. Long-Term Outlook • General Fund revenues are not expected to reach FY 2007 peak until FY 2014

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