Economic Report - City Controller

1 downloads 189 Views 2MB Size Report
Jun 3, 2016 - to the sale price, which three percent goes to the. City and one ... and Business Income tax revenues were
Economic Report Financial Forecast & Snapshot

Office of the City Controller

Monthly Feature:

Snapshot Highlights Tax revenues (City & PICA) for June totaled $209 million, which is a three percent increase over last June. A breakdown of the total revenues included $174 million into the General Fund and $35 million as the PICA portion.

The Wage/Earnings and Business Income tax categories posted increases over FY12 of 16.2 percent and 28.2 percent, respectively. A breakdown of these yearly tax revenues indicated that Wage/Earnings were up by almost $200 million and Business Income tax revenues were up almost $110 million.

Page 3 Phila.

Yearly Unemployment Rate

10

MSA U.S.

8 6 4 2

Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

May-16 City - 6.7% MSA - 5.3% June-16 US - 4.9%

Monthly sales tax revenues for June totaled $11.9 million. This is a less than one percent decrease over the same month last year. Yearly revenues totaled almost $159 million, which is an almost five percent increase over last year.

Apr-16 6.3% 5.0% May-16 4.7%

Change 0.4 0.3 Change 0.2

May-15 7.1% 5.6% June-15 5.3%

Millions of Dollars

unemployment rates are non-seasonally adjusted FY14

170

FY15

140

FY16

110 80

July

Aug.

Sept.

Oct.

Wage/NPT/Earnings (City & PICA Yearly) 28 26 24 22 20 18 16 14 12 10 8

FY13

Monthly City & PICA Wage/Earnings/NPT Receipts

200

(in millions)

Millions of Dollars

The most significant revenue increase over FY12 was realized by the almost doubling of the Realty Transfer Tax collections from $119 million to more than $236 million. This is a direct result of the strong home sales that have occurred in various sections of the City. This tax is levied on the sale or transfer of real estate and applied to the sale price, which three percent goes to the City and one percent to the Commonwealth.

June 2016

Realty Transfer Tax revenues climbs 98% since FY2012; result of significant spike in home sales

Wage/Earnings/NPT (City & PICA) collections for the month totaled $144.7 million, a 5.7 percent increase over the same month last year. Yearly revenues totaled almost $1.9 billion, a six percent increase over FY2015.

Along with reviewing monthly General Fund collections, the economic report reviewed total annual tax collections over the last five years. Total Fiscal Year (FY) 2016 tax revenues were above $3 billion, an increase of $430 million over FY12. Every major tax category posted a double-digit increase over the five-year period, excluding the Sales Tax which the City’s portion was reduced by half to provide additional funds for the School District of Philadelphia.

Alan Butkovitz

Nov.

Dec.

Jan.

Feb.

FY2016 $1,851.8

Mar.

Apr.

May

June

FY2015 $1,752.4

Change 5.7%

Monthly City Sales Tax Receipts FY13 FY14 FY15 FY16

July

Aug.

Sept.

Oct.

(in millions)

Sales (Yearly) -

Nov.

Dec.

Jan.

FY2016 $158.9

Feb.

Mar.

Apr.

FY2015 $151.9

May

June

Change 4.6%

According to PICA, collections for a single month can be a misleading indicator due to monthly variability in collections

Key Indicators 5.7% = increase in 4.6% = Yearly Sales yearly Wage/NPT/ Tax increase over Earnings revenues last year over FY15

13% = monthly home sales up over last June

46.3 = Index up 10 points for future growth among non-manufacturing firms pg.1

Economic Report Financial Forecast & Snapshot

Office of the City Controller

Alan Butkovitz June 2016

Current Employment Data & Forecasted Conditions Nonmanufacturing Business Outlook Survey According to the Philadelphia Federal Reserve’s latest Nonmanufacturing Business Outlook Survey, firms reported significant changes in the hiring of part-time employees and the rising costs associated with wages and benefits.

The Wage and Benefit Costs Index jumped almost eight points from 26.7 to 34.4 over the last month. Almost 38 percent of firms reported an increase in these costs compared to only three that reported a decrease. The majority reported no The Part-Time Employment Index change. increased from 10.3 to 22 over the last month. While the majority of In addition, firms continued to firms indicated no change, more be optimistic about future acthan 32 percent reported an increase tivity over the next six months Chart from the July 2016 Federal Reserve Bank of in part-time hiring compared to 10 as the Diffusion Index for Fu- Philadelphia’s Nonmanufacturing Business Outlook Survey who reported a decrease. The Full- ture Activity at the fir level inTime Index decreased from 18.3 to creased by 10 points from 36.7 to 1.9 over the same period, with the 46.3. This is the highest reading majority of firms also reporting no over the last three months. change. Total Non-Farm Employment (latest data available) May 2016 698,900

April 2016 702,200

Construction

11,700

11,500

Manufacturing

20,900

20,800

Trade, Trans. & Utilities

93,900

93,200

Information

10,800

11,900

Financial Activities

43,700

43,500

Prof. & Business Srvs.

94,300

92,800

Educ. & Health Srvs.

222,500

227,500

Leisure & Hospitality

71,400

70,500

Other Services

27,900

28,200

Government

101,800

102,300

City Total

% Chg.

-0.5% 1.7% 0.5% 0.8% -9.2% 0.5% 1.6% -2.2% 1.3% -1.1% -0.5%

May 2015 684,800 11,500 21,200 91,800 11,700 42,300 90,000 216,900 69,800 27,400 102,200

City of Philadelphia Demographics

Demographic data was compiled from the 2014 American Community Survey

pg.2

Economic Report Financial Forecast & Snapshot

Office of the City Controller

Alan Butkovitz June 2016

City Tax Revenues Up by Double Digits Almost $430 million more into the City’s General Fund Over FY2012 The City of Philadelphia’s economic growth since the Great Recession has not only boosted jobs, wages and leisure spending but it has increased tax revenues by almost 17 percent for the City’s General Fund. Total Fiscal Year (FY) 2016 tax revenues were just above $3 billion, an increase of $430 million over FY12. Every major tax category posted a double-digit increase over the five-year period, excluding the Sales Tax which the City’s portion was reduced by half to provide additional funds for the School District of Philadelphia. The most significant revenue increase over FY12 was realized by the almost doubling of the Realty Transfer Tax collections from $119 million to more than $236 million. This is a direct result of the strong home sales that have occurred in various sections of the City. This tax is levied on the sale or trans-

fer of real estate and applied to the sale price, which three percent goes to the City and one percent to the Commonwealth. The Wage/Earnings and Business Income tax categories posted increases over FY12 of 16.2 percent and 28.2 percent, respectively. A breakdown of these yearly tax revenues indicated that Wage/ Earnings were up by almost $200 million and Business Income tax revenues were up almost $110 million. These types of increases imply strong job growth and profitability. In addition, Real Estate Tax revenues were up by 16 percent over FY12. During this time period, the tax rate was raised for FY14 and FY16 which can be attributed to the increase in overall revenues collected.

City General Fund Tax Revenues FY12 vs FY16 (amounts in thousands) FY12 FY16 % Diff. Major Tax Type Wage, Earnings & Net Profits

$1,211,444

$1,407,292

16.2%

Real Estate

$500,721

$581,853

16.2%

Business Income & Receipts

$389,386

$499,232

28.2%

Sales

$253,523

$158,940 -37.3%

Realty Transfer

$119,364

$236,282

98.0%

$96,007

$116,504

21.3%

$2,570,445

$3,000,103

16.7%

Other Total

Total Revenues by Major Tax Categories FY12 to FY16 $1,600,000 $1,400,000

Wage, Earnings & Net Profits

$1,200,000

Real Estate

$1,000,000

Business & Income & Receipts

$800,000

Sales

$600,000 $400,000

Realty Transfer

$200,000

Other

$0 FY12

FY13

FY14

FY15

FY16*

M onthly H ome S ale D ata June 2016 - Top 10 Sales by Zipcode ZIP Code

Sales

% of Sales from Bank Owned

% of Sales from Short Sales

19146

120

3.30%

0.00

19128

93

2.20%

1.10%

19147

86

0.00%

0.00%

19148

85

1.20%

0.00%

19125

70

0.00%

0.00%

19149

68

4.40%

1.50%

19111

66

4.50%

1.50%

19130

63

1.60%

0.00%

19145

56

3.60%

0.00%

19119

53

5.70%

1.90%

Based on information from TREND for June 2016.

19128

19111

19119

19149

19130

19125

19146 19147 19145 19148

1,738 = Total monthly real estate sales in Philadelphia 13% = increase in monthly sales compared to June 2015 pg.3