General Fund revenues dip in August, still up year-over-year

General Fund revenues dip in August, still up year-over-year
(Source: Telemundo60)

(WBRC) - Tax revenues into the state’s General Fund declined in August, but the fund’s growth is still up year-over-year despite six months of the coronavirus outbreak’s impact on businesses and citizens.

The General Fund, which supports non-education related state agencies, and the Education Trust Fund, are expected to end the 2020 fiscal year at the end of this month with more revenue than in 2019, Kirk Fulford, Deputy Director of the Legislative Services Agency, said Tuesday.

“In general, the whole story on the General Fund is, through March it was growing at a little over $100 million dollars, which was about 11.5%,” Fulford said. “And five months after that, it’s grown by $140 million, year-to-date growth of 7.2%.

Receipts now total just over $2 billion.

“… It grew, but it grew at a slower rate than what it was doing before COVID impacted it,” Fulford said.

Some of the revenues that have declined this year are the lodging tax on hotels, interests on state deposits, leasing taxes and oil and gas production taxes.

A bright spot in the General Fund continues to be the simplified sellers use tax, that 8% tax on online purchases. It’s up $64 million or 105% this year in the General Fund.

“We could go along right now with no growth and live within the budget we have,” said Sen. Greg Albritton, Chair of the Senate’s General Fund Committee.

Albritton said his committee will meet later this month to discuss the first quarter of the 2021 budget that starts Oct. 1. He praised the Legislature for steps it took in the spring to navigate the pandemic, including reducing expenditures in the 2021 budget.

In the Education Trust Fund, receipts were up significantly in August, buoyed by COVID-19-delayed income tax payments made in July but not processed until August, Fulford said.

For the year, the ETF is up about $252 million or 3.9%. Like in the General Fund, revenues in the ETF are less than what was expected earlier this year, pre-COVID-19.

Still, positive growth this year is significant, Fulford said.

“Based on where we’ve been before, who would have thought we would be sitting here saying this: The ETF is going to end the year with positive growth in the middle of recession,” Fulford said. “We’re going to be able to deposit additional money into a reserve fund. And actually, appropriations for the fiscal year that starts in October will be less than actual receipts for the current fiscal year.”

That means there’s some “wiggle room” should there be another event that causes a decline in revenues.

“So it’s actually about as good as you could possibly ask for it to be, in light of everything that’s going on,” Fulford said.

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