Tuesday, June 16, 2009

Senate Update: I Haven't Recieved My Refund

Some have noted that they are experiencing delays this year in the receipt of refunds or even in the state cashing their payments. Georgians have the option to file their state tax returns either electronically (over the internet) or using traditional paper forms. When returns are filed electronically, they do not need to be physically opened, nor do they require data entry. For this reason, the time required to process and to issue refunds for returns filed electronically has stayed consistent - and quick - at 6 to 10 days. While the processing of electronic claims has stayed the same, working through this year's paper claims is taking longer.

In prior years, the Department of Revenue would process a paper return in 4 to 10 weeks. However, recent budget cuts have increased the time taken to process paper returns. In the amended FY09 budget, the state had to find around $2 billion in cuts because of the economic downturn and agencies were asked to submit proposals to reduce spending. The Department of Revenue proposed to reduce its budget by $2.4 million by eliminating two shifts of temporary workers that were used to process paper claims.

At the same time that capacity dropped, the number of claims filed has stayed roughly consistent. So, with an equal workload and less capacity, a backlog has developed. The date that a return was filed has a direct effect on when citizens can expect to receive their return. It is a given that everyone is more anxious to receive their refund this year because of the economy.

According to the Revenue Department, here are the turnaround times for paper returns based on the date the Department received them:

Prior to April 1st - 10 to 12 weeks
April 1st to 10th - 12 to 14 weeks
After April 10th - 14 to 20 weeks


INDIVIDUAL INCOME TAXES - "Incoming is down, Outgoing is Up"

Individual Income Taxes - In the 2009 Fiscal Year, only two months, September and November exceeded the previous years same month, and only by about $30 million each.

The other eight months total a decline of some $884 million in FY09 under FY08.

Individual Income Taxes are 50% of state revenues. Some categories making huge decreases were Estimated Payments - $353 million or 28.6% and individual returns down $177 million or 25.6%.

Conversely, refunds to individuals are up $71 million but only 3.8%. Individual income tax payments to the state are down by $145 million and refunds are up on over 200,000 returns totaling $70 million.


Sales tax revenues have declined 8.31% YTD. This is a shade better than the 9.83% that Individual Income Taxes have declined YTD.

The distribution to local governments has declined about the same amount as the overall decline, -7.8% which is somewhat of a surprise, because it shows that local sales tax revenues are declining at approximately the same rate as state sales taxes.

Within categories, home furnishings were up in May by about 9% and manufacturing sales tax collections were up about 10% for May. Automotive sales taxes were down 44% over May of 2008.

Motor Fuel continues to lag, down by 13.7% combined, with the drop in fuel prices decreasing the sales taxes by 19%. Additionally, usage by the gallon continues to decrease excise tax collections some 7.4% YTD.

Corporate Income Taxes are off 26.7%. Refunds are up 54.5%, estimated payments down 20%, S Corp income taxes down 36% but assessments were up 289% or $47 million.

Whether there are green shoots of recovery sprouting or just more weeds due to the rain is debatable.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.
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Monday, June 8, 2009

June 8th Notes from the Senate

By Senator Ronnie Chance,
16th District


Maybe it was a little anticlimactic since the Governor lowered the Revenue Estimate at the end of May and assessed agencies 25% of the June allotments, but the May revenues are in and while certainly not positive, are actually about 6% under the worse case scenario envisioned a week ago.

Revenues for the month of May were down 14.4% overall or some $211.7 million down from May of 2008. Individual income tax collections were down 21.2% continuing a consistent negative trend. May Sales taxes were down overall $181 million or 20.2%. Of that, local sales tax collections were down $173 million, so most of the loss occurred in local collections. Motor fuel taxes were down an additional $23 million for both excise and sales taxes. Corporate income taxes were down about $10 million.

So, Year-To-Date figures continue to disappoint and cause that sinking feeling. Overall, revenues are down over 10% or $1.5 billion dollars for the first 11 months. Individual income taxes are down 11.0% or $884 million. Sales taxes are down overall $780 million or 8.0% of which the state portion is -$404 million or -7.6%. Motor fuel taxes are down collectively $126.8 million or -13.7%. Corporate income taxes are down $211 million or -26.7%.

The state has now used up about $300 million of the $562 million in the Shortfall Reserve Fund with a month to go.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.