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MONTHLY REVIEW F E D E R A L R E S E R V E B A N K OF A T LA N T A APRIL 1970 R evenue S h a rin g : W h a t It M ig h t M e an C on gress is now s tu d y in g an A d m in is tr a tio n - r e s u ltin g in a fis c a l m is m a tc h . S in c e m o s t F e d e r a l s p o n s o r e d p r o p o s a l fo r s h a r in g F e d e r a l r e v e n u e s revenues w ith s t a t e a n d lo c a l g o v e r n m e n ts . T h is , h o w e v e r , su ch is o n ly t h e m o s t r e c e n t o f s e v e r a l p r o p o s a ls fo r te n d e n c y s h a r in g F e d e r a l ta x r e v e n u e w ith s t a t e a n d lo c a l fa ste r g o v e r n m e n ts. 1 0 - p e r c e n t i n c r e a s e i n t h e n a t i o n ’s g r o s s n a t i o n a l The id e a o r ig in a lly cam e to th e fo r e fr o n t in th e m id - s ix t ie s .1 T h is a r tic le p o in ts d is c u s s e s o u t, in p r e se n ts a p r o p o s a ls have le d te n ta tiv e s h a r in g , if e n a c t e d co n c e p ts to th e m . In a n a ly s is in to of d e r iv e d fr o m p erson al fo r F e d e r a l ra te th a n th e r e is a to grow at a e x a m p le , a econ om y. an ta x es, ta x , revenues th e g en era tes p r o g r e s s iv e in c o m e For e s tim a te d 1 5 -p e rcen t in and c r e a s e in F e d e r a l p e r s o n a l in c o m e ta x c o lle c t io n s . and D e s p it e a n a v e r a g e c u t o f a b o u t a d d itio n , how are th e produ ct th e se g en era l term s, th e tr e n d s w h ic h as it revenue la w , m ig h t a f f e c t s t a t e a n d lo c a l g o v e r n m e n ts in s ix S o u th e a s te r n s ta te s . 15 p e r c e n t in F e d e r a l ta x r a te s s in c e 1 9 6 1 , F e d e r a l t a x r e c e ip t s g r e w f r o m 1 8 .4 p e r c e n t o f G N P in 1 9 5 7 t o 1 8 .8 p e r c e n t i n 1 9 6 1 t o 1 9 .0 p e r c e n t i n 1 9 6 7 . F e d e r a l e x p e n d itu r e s , o n t h e o th e r h a n d , h a v e g row n a t a b o u t th e sa m e r a te a s th e ec o n o m y . C o n c e p ts F ederal e x p e n d itu r e s , as a percent of GNP, r e a c h e d a p o s t w a r h i g h o f 2 1 .1 p e r c e n t i n 1 9 5 3 ; W h a t is r e v e n u e sh a r in g ? I s it a n e x t e n s io n o f e x is tin g F e d e r a l a id p r o g r a m s, o r is it s o m e th in g r e a lly n ew ? R evenue s h a r in g program s in v o lv e tw o e s s e n t ia l c h a r a c t e r is t ic s . F ir s t , a p o r t io n o f F e d e r a l r e v e n u e s w o u ld b e tu r n e d o v er to su b n a tio n a l g o v e r n m e n ts fo r th e ir u s e . S e c o n d , th e r e w o u ld b e n o r e s t r ic tio n o n t h e f in a l u s e o f t h e fu n d s b y th e g o v e r n m e n ts. T h e u s e d in fu n d s c o u ld be a n y m a n n e r th e s e g o v e r n m e n ts c h o o se . O b v io u s ly , th is concept d iffe r s g r e a tly fro m t h e fa m ilia r e a r m a r k e d F e d e r a l g r a n t w h ic h m u s t be s p e n t fo r m odern a tim e s , d is tr ib u te d to s p e c ific F ederal p ro ject fu n d s s u b n a tio n a l or p u rp o se. have n ever g o v e r n m e n ts In been fo r u n r e s tr ic te d u s e . T h u s , r e v e n u e s h a r in g r e p r e s e n ts a r e m a r k a b le c h a n g e in in te r g o v e r n m e n ta l f is c a l i n 1 9 6 7 , t h e y s t o o d a t 2 0 .7 p e r c e n t . T h u s , u n l e s s ta x e s a re c u t or e x p e n d itu r e s in c r e a s e d a t a m o r e r a p id r a te ten d e n c y r a p id ly w ord s, th a n fo r th a n a in th e F ederal F ederal F ederal p a st, th e re r e c e ip t s to w ill e x p e n d itu r e s . “ fis c a l be grow d iv id e n d ” In or a m ore o th e r s u r p lu s te n d s to d e v e lo p . S u b n a tio n a l g o v e r n m e n ts f a c e a d iffe r e n t s it u a tio n . T h e n e e d s e r v ic e s and fo r s t a t e and c o n s e q u e n tly h a v e g ro w n m o r e r a p id ly lo c a l th e ir th a n th e eco n o m y . In 1 9 5 0 , th e s e e x p e n d itu r e s a c c o u n te d cen t of G N P . B y governm ent e x p e n d itu r e s 1967, th e y had fo r 9 .8 p e r r is e n to 1 3 .5 p e r c e n t a n d m ig h t h a v e b e e n h ig h e r if t h e y h a d been fin a n c e d . O n th e o th e r h a n d , m o s t s t a t e a n d lo c a l g o v e r n - r e la tio n s h ip s . W hat has R e c e n tly , th e p ro m p ted d iffe r e n c e t h is p ro p o sed b etw een chan ge? revenues and e x p e n d itu r e s a t v a r io u s le v e ls o f g o v e r n m e n t h a s b e c o m e a c u te . A d is t in c t p a tte r n h a s d e v e lo p e d , M o n th ly R eview , Vol. L V , No. 4. Free subscription and additional copies available upon request to the Research Departm ent, Federal Reserve B a n k of Atlanta, Atlanta, G eorgia 30303. ’ T h e A d m in is t r a t io n p la n in t r o d u c e d b y S e n a to r H o w a r d B a k e r is e m b o d ie d in S .2 9 4 8 . I n t h e p a s t , o t h e r p r o g r a m s h a v e b e e n p r o p o s e d w h ic h w o u ld h a v e s e r v e d th e s a m e p u r p o s e a s re v e n u e s h a r in g . T a x c r e d it s c h e m e s w e re a m o n g th e m o s t p r o m in e n t . F o r v a r io u s r e a s o n s , s u p p o r t f o r t h e m h a s d im in is h e d w h ile s u p p o r t f o r r e v e n u e s h a r in g has in c r e a s e d . A s e c o n d p la n , g e n e r a lly a t t r ib u t e d to th e A d v is o r y C o m m is s io n o n I n t e r g o v e r n m e n t a l R e la t io n s , is e m b o d ie d in th e p r o p o s e d “ I n te rg o v e rn m e n ta l R e v e n u e A c t o f 1 9 6 9 ” ( S .2 4 8 3 ). M O N TH LY 50 R E V IE W m e n t r e v e n u e s a r e d e r iv e d fr o m s o u r c e s w h ic h good r e a s o n s fo r m a in ta in in g a s tr o n g program in c r e a s e a t a b o u t th e s a m e r a te a s th e e c o n o m y . of O v e r 7 5 p e r c e n t o f th e ir ta x r e v e n u e is d e r iv e d a r e m o s t e f fe c tiv e ly a d m in is te r e d o n lo c a l le v e ls , fr o m even s a le s , gross r e c e ip ts , and p ro p erty ta x es. su ch fu n c tio n a l th o u g h T h u s , t h e tr e n d a t th e s u b n a tio n a l le v e l h a s b e e n r e s tr ic te d fo r e x p e n d itu r e s to o u tp a c e r e v e n u e s — w ith g o v e r n m e n t. th e g r a n ts. S o m e p u b lic th e b e n e f its fro m to th e j u r is d ic t io n The b e n e fits th e m of can n ot be th e fr o m goods p r o v id in g th ese p u b lic r e s u lt t h a t m a n y o f th e s e g o v e r n m e n ts h a v e b e e n g o o d s “ s p ill o v e r ” to o th e r a r e a s. F o r e x a m p le , fa c in g w h a t m ig h t b e c a lle d a “ f is c a l d e f ic it .” a S ta te and lo c a l g o v e r n m e n ts h a v e resp on d ed c i t y ’s s a n ita tio n fa c ilit ie s and p u b lic h e a lth p ro g ra m s c e r ta in ly b e n e fit c itiz e n s o f c o n tig u o u s to t h is n e e d fo r in c r e a s e d r e v e n u e b y in c r e a s in g s u b u r b a n a r e a s b y p r e v e n tin g th e s p r e a d o f c o n t h e i r t a x e s . T h e i r t a x r e c e i p t s r o s e f r o m 6 .1 p e r ta g io u s c e n t o f G N P i n 1 9 5 0 t o 8 .8 p e r c e n t i n 1 9 6 7 . B u t c it y ta x e s to su p p o r t th e s e p ro g ra m s. I n s im p le t h is m o d e r a te in c r e a s e w a s n o t e a s ily a c h ie v e d ; d is e a s e . Y et th e s u b u r b a n ite s pay no te r m s, t h e c i t y w o u ld n o t b e p a id fo r a ll o f t h e it c a r r ie d a h ig h p r ic e . P r o b le m s o f a d m in is t r a s e r v ic e s it p r o v id e s . tio n to p r o v id e fe w e r o f t h e s e s e r v ic e s th a n it w o u ld and c o lle c tio n , in te r s ta te c o m p e titio n , and C o n s e q u e n tly , it w ill te n d h e a v y F e d e r a l u sa g e h a v e h a m p e r e d th e a b ility if it w e r e c o m p e n s a te d b y a ll w h o s h a r e in th e o f t h e s e g o v e r n m e n ts to e m p lo y m o r e e q u ita b le , b e n e fits . n o n r e g r e s s iv e r e v e n u e s o u r c e s. A s a r e s u lt, t h e y s t a t e o r F e d e r a l G o v e r n m e n t c o u ld O n ly an earm arked h a v e r e s o r te d to n e w o r h ig h e r r e g r e s s iv e ta x e s . th e E ven th e ta x en su re th a t fu n d s are u sed have a ls o in c r e a s e s w e r e n o t e n o u g h . T h e y g r e a tly in c r e a s e d th e ir d e b t. G ross d e b t o f s u b n a t io n a l g o v e r n m e n ts r o s e fro m c ity fo r th e s u b n a tio n a l w a y s m u st b e fo u n d g o v e r n m e n ts b e n e fits and a ls o to p r o v id e a d e q u a te s a n it a tio n f a c ilit ie s a n d p u b lic h e a lt h p rogram s. The P r o p o s a ls to h e lp gap T h e A d m in is tr a t io n r e v e n u e s h a r in g p la n , if e n a c t e d , w o u ld p r o v id e fo r t h e a n n u a l d is t r ib u tio n n u e s h a r in g of p o se, is a p la n d e fic it b y u n earm ark ed to th e th e b e tw e e n th e ir e x p e n d itu r e s a n d r e v e n u e s . R e v e lo c a l f is c a l fill of fr o m co m p en sa te $24 b illio n in 1 9 5 0 to o v e r $ 1 1 4 b illio n in 1 9 6 7 . O b v io u s ly , n e w sp illo v e r grant g r o w in g r e lie v e th e d is tr ib u tin g g ra n ts sta te an d gen eral fro m th e pur F ederal G o v e r n m e n t to th e s e g o v e r n m e n ts. A t th e sa m e tim e th a t th e s u b n a tio n a l d e f ic it is r e lie v e d , th e g o v e r n m e n ts’ g r a n ts w o u ld fis c a l d is p o s e of s o m e o f th e fu tu r e F e d e r a l fis c a l d iv id e n d s . S u b n a tio n a l g o v e r n m e n ts o f p u b lic r e s o r t in g t o n e w c o u ld goods and im p r o v e s e r v ic e s u te d a n n u a lly o r h ig h e r r e g r e s s iv e ta x e s . I n ( th e annual tio n w o u ld b e o n e - s ix t h fis c a l th e sta te s and th e fu n d ) w o u ld equal year in b e g in n in g gradual o f o n e p e r c e n t fo r th e J u ly 1, 1970, in c r e m e n ts to b u t w o u ld one percent fo r th e fis c a l y e a r 1 9 7 6 a n d th e r e a fte r . th e ir w ith o u t am ong a p r o p o r tio n o f t o ta l ta x a b le in c o m e . T h e p r o p o r in c r e a s e T h e r e a r e m a n y a d v a n ta g e s to r e v e n u e s h a r in g . p r o v is io n F ederal revenues D is t r ic t o f C o lu m b ia . T h e t o ta l a m o u n t d is t r ib T h e p e r c e n t a g e o f th e a n n u a l fu n d w h ic h g o e s t o a p a r t i c u la r s t a t e g o v e r n m e n t d e t e r m in e d p r im a r ily b y (its sh a re) is t h e s t a t e ’s p o p u l a t i o n . s t e a d , F e d e r a l t a x r e v e n u e w o u ld b e s h a r e d w ith I t is a d ju s te d , h o w e v e r , fo r t h e r e v e n u e e ffo r ts th e m . of S in c e th e c h o ic e o f p r o je c ts a n d over th e e x p e n d itu r e s le v e l, s u b n a tio n a l m ore r e s p o n s iv e u e n ts. F ederal w o u ld be g o v e r n m e n ts to th e needs a s s is ta n c e on th e s h o u ld of th e ir w o u ld c o n tr o l lo c a l becom e c o n s tit b ecom e le s s a ll c ity , its s p e c ia l to u n its of in d e p e n d e n t d is tr ic ts . fin a n c e th e ir g o v ern m e n t— sta te , sch o o l S ta te s d is tr ic ts , m a k in g e x p e n d itu r e s str o n g fro m c o u n ty , and o th e r e ffo r ts th e ir ow n s o u r c e s w o u ld r e c e iv e m o r e th a n s t a t e s m a k in g payment e n c u m b e r e d a n d m o r e e f fic ie n t a s r e c ip ie n t d e o n ly w e a k e ffo r ts . T h e to ta l a n n u a l te r m in a tio n b e c o m e s a u to m a tic a n d a p a r t i c u la r s t a t e g o v e r n m e n t e q u a l s t h e p r o d u c t tio n s h ifts to p la n sh o u ld lo c a l reduce g o v e r n m e n ts. th e a d m in is tr a F in a lly , a d m in is tr a tiv e th e c o sts o f c o lle c tin g ta x e s. I n s te a d o f a m u ltitu d e o f c o m p e tin g ta x c o lle c to r s , G o v e r n m e n t— w o u ld o n ly p erfo rm o n e— th e a la r g e r part ta x p a y e r, is not a c u r e -a ll. It sh o u ld a u g fn e n t, r a th e r th a n r e p la c e , e a r m a r k e d F e d e r a l g r a n ts to s t a t e a n d lo c a l g o v e r n m e n ts . T h e r e a r e A P R IL 1970 a n d th e to ta l a n n u a l fu n d . P a y m e n t s E ach s t a t e g o v e r n m e n t m u s t, in tu r n , d is t r ib of B u t r e v e n u e s h a r in g , a lt h o u g h it w o u ld b e n e th e share to s t a t e s w o u ld b e m a d e a t le a s t q u a r te r ly .2 F ederal th e ch ore. fit o f its to 2 T h e s h a r e o f a s t a t e is d e f in e d t o b e t h e p r o d u c t o f it s p o p u l a t i o n a n d it s r e v e n u e e f f o r t d i v id e d b y t h e s u m o f a ll s u c h p r o d u c t s f o r a ll f if t y - o n e r e c ip ie n ts . T h e r e v e n u e e f f o r t o f a s t a t e is d e t e r m in e d b y d i v id in g ( 1 ) t h e t o t a l g e n e r a l r e v e n u e ( f r o m t h e ir o w n s o u r c e s ) r a is e d b y th e s t a t e g o v e r n m e n t a n d a ll it s u n it s o f l o c a l g o v e r n m e n t b y ( 2 ) th e to ta l p e r s o n a l in c o m e o f th a t sta te . 51 u te to s o m e o f it s lo c a l g o v e r n m e n ta l u n its a p a r t w o u ld th e o f t h e r e v e n u e w h ic h i t r e c e iv e s u n d e r t h e p la n . n eed s? In O n ly b e g r e a t. I n d e e d , th e a m o u n ts sh a r e d w o u ld b e g e n e r a l p u r p o s e lo c a l g o v e r n m e n ts — c o u n program a b s o lu te go t ie s , c it ie s , t o w n s h ip s — w o u ld sh a r e . I n d e p e n d e n t s m a ll c o m p a r e d w ith sch ool m e n ts d is tr ic ts th o u g h w o u ld th e y and o th e r c o n tr ib u te s p e c ia l to n o t a u to m a tic a lly th e d is tr ic ts , a l revenue e ffo r t, fu n d s. T hey r e c e iv e r a is e fr o m to w a rd te r m s th e th e rev en u e th e se th e ir ow n era l p u r p o se g o v e r n m e n ts. c o n tr ib u te to th e ir s o lu tio n . a m ou n t p a ssed th e sta te im p o r ta n c e on to lo c a l governm ent of th e se g o v e r n m e n ts dep en d s u n its in th e on s t a t e ’s th e to ta l sou rces. not govern H ow ever, fu n d s . C o n s e q u e n tly , a lth o u g h s h a r in g w o u ld n o t so lv e The th e ir it w o u ld b e a g r o w in g a n d n e w s o u r c e o f n e e d e d m u s t r e ly , in s te a d , o n t h e g e n e r o s ity o f th e g e n by m e e t in g e f fe c t w o u ld a ll of th e ir fin a n c ia l p r o b le m s , it w o u ld F l o r id a , t h e m o s t p o p u l o u s S o u t h e a s t e r n s t a t e , h a s t h e la r g e s t c o m b in e d (T a b le 1 ). It sta te w o u ld and r e c e iv e lo c a l s h a r e 3 .1 7 percent g o v e r n m e n ta l a c t iv it y . T h e p r o p o r tio n o f s h a r e d o f th e to ta l fu n d . M is s is s ip p i, w ith th e s m a lle s t reven u es p o p u la tio n , t h a t lo c a l g o v e r n m e n ts r e c e iv e b e th e s a m e a s t h e p r o p o r tio n revenue r a is e 3 0 th e y r a is e . T h u s, p e r c e n t o f a ll w o u ld o f to ta l g e n era l if lo c a l reven u e g o v e r n m e n ts r a is e d by su b 1 .3 4 w o u ld p ercen t. s h a r e , is f o llo w e d b y A la b a m a in n a t i o n a l g o v e r n m e n t s i n a p a r t i c u la r s t a t e , t h e n tio n , r a n k in g th e y w o u ld r e c e iv e 30 percent of S e n a te v e r s io n of revenue th e th a t th e w ith s m a lle s t th e sh a re— se co n d la r g e s t L o u is ia n a , T e n n e s s e e , a n d order. W ith o f sh a res o n ly one excep co rresp on d s to th e th e sh ared r a n k in g o f t h e s e s t a t e s b y p o p u la t io n . T e n n e s s e e , w h ic h has a s h a r in g d iffe r s w o u ld r e c e iv e r e v e n u e g o in g to t h a t s ta te . ’ A r e c e iv e G e o r g ia , la r g e r p o p u la t io n a s m a lle r sh are th a n L o u is ia n a , th a n L o u is ia n a . f r o m t h e A d m i n i s t r a t i o n ’s p la n . P e r h a p s t h e m o s t T h e r e a s o n fo r t h is is s im p le . W h e n t h e s t a t e s ’ im p o r ta n t d iffe r e n c e p o p u la t io n s a r e a d j u s t e d fo r t h e ir r e v e n u e e ffo r ts , is th a t it w o u ld cost th e F e d e r a l G o v e r n m e n t m o r e . T h e r e v e n u e s h a r in g L o u is ia n a m o v e s a h e a d o f T e n n e s s e e . O f t h e s ix fu n d ta x a b le in c o m e sta tes p erson al in c o m e r e v e n u e e ffo r t— t h a t is , t h e g e n e r a l r e v e n u e s o f ta x c o lle c t io n s in th e p r e v io u s y e a r . T h is fo r m u la a ll it s u n its o f g o v e r n m e n t a r e a h ig h e r p r o p o r p lu s w o u ld 25 be one percent of p e r c e n t o f to ta l sta te c o n s id e r e d , L o u is ia n a has th e h ig h e s t w o u ld r e s u lt in t h e F e d e r a l G o v e r n m e n t s h a r in g t i o n o f L o u i s i a n a ’s p e r s o n a l i n c o m e t h a n i n a n y a b o u t $ 7 b illio n o f it s r e v e n u e in f is c a l 1 9 7 1 a n d o th e r a b o u t $ 1 0 b illio n t h e n e x t y e a r . T h e A d m in is tr a g r e a te r ta x e ffo r t r e s u lts fr o m tio n p r o p o sa l p r o v id e s fo r a fu n d o f a b o u t $ 2 7 5 la r g e -s c a le o il p r o d u c tio n . m illio n in f is c a l 1 9 7 1 . T h is w o u ld g r o w to a b o u t $ 4 b illio n b y fis c a l 1 9 7 6 . In a d d itio n , th e r e is a m a jo r d iff e r e n c e in th e The sta te (T a b le r a n k in g th e m s e lv e s c lo u d y . ta k in g A fte r to S e n a te v e r s io n , s t a t e g o v e r n m e n ts w o u ld govern m en t of q u ir e d to p a s s th r o u g h fu n d s to o n ly th o s e lo c a l o f sh a res g o v e r n m e n ts w a y s a s t a t e c o u ld u s e it s sh a r e d fu n d s. I n th e be re 2 ). lo c a l th e g o v e r n m e n ts F lo r id a M uch of a c c r u in g is to to ta x th e sta te so m ew h a t r e q u ir e d in to L o u i s i a n a ’s its a b ility d is tr ib u tio n s a c c o u n t, w o u ld m ore r e c e iv e th e sta te 2 .2 4 p er c e n t o f th e to ta l fu n d a n d w o u ld r a n k f ir s t a m o n g g o v e r n m e n t s w i t h p o p u l a t i o n s o f 5 0 ,0 0 0 o r m o r e . S m a lle r lo c a l g o v e r n m e n ts w o u ld c a lly sh a re. A ls o , so m e of th e n o t a u to m a ti fu n d w o u ld be T a b le r e se r v e d fo r e d u c a tio n a l p u r p o se s. H o w W ill P e r c e n t o f T o ta l F u n d T o B e R e c e iv e d b y D is t r ic t S t a t e a n d L o c a l G o v e r n m e n t s R e v e n u e S h a r in g A ff e c t th e S o u t h e a s t ? W h a t w o u l d t h e A d m i n i s t r a t i o n ’s p l a n m e a n f o r g o v e r n m e n ts in th e S o u th e a st? J u st 1 how fa r ^ T h e s h a re o f a ll g e n e ra l p u r p o s e lo c a l g o v e rn m e n ts in a s t a t e w o u ld e q u a l a f r a c t io n w h o s e n u m e r a t o r is t o t a l g e n e ra l re v e n u e o f a ll g e n e ra l p u r p o s e lo c a l g o v e rn m e n ts in t h e s t a t e a n d w h o s e d e n o m in a t o r is t o t a l g e n e r a l r e v e n u e o f a ll u n it s o f g o v e r n m e n t in t h e s ta te . T h e p r o p o r t io n g o in g t o a n i n d i v i d u a l u n i t o r g o v e r n m e n t is d e t e r m in e d in th e s a m e m a n n e r e x c e p t th a t th e n u m e r a t o r o f th e f r a c t io n is t h e g e n e r a l r e v e n u e o f t h e i n d iv id u a l g o v e r n m e n t in q u e s t io n . State State P lu s Local Local State A lab am a 1.80 0.45 1.35 F lorida 3.17 0.92 2.24 Georgia 2.23 0.49 1.73 2.22 0.39 1.83 L o u isian a M ississip p i 1.34 0.32 1.03 Tennessee 1.85 0.80 1.04 Source: Special A n alyse s of the Bu d ge t U nited States, Fiscal Y e a r 1971 of the MONTHLY REVIEW 52 T a b le 2 T a b le R a n k in g s of D is t r ic t S t a t e s by P o p u la t io n a n d R e v e n u e E ffo rts of A ll U n it s of G o v e r n m e n t Size of F u n d to be D istributed Population 1967 and 1968 1967 1968 A lab am a 5 4 3-4 F lo rid a 1 3 3-4 G eorgia 2 5 5 Lo u isian a 4 1 1 M ississip p i 6 2 2 Tennessee 3 6 6 Federal Reserve B a n k of A tla n ta S o u th e a ste r n sta te s e c o n d , f o llo w e d g o v e r n m e n ts. by R e c e ip t s fro m R e v e n u e S h a r in g by T y p e of G o v e r n m e n t 1 ($ m illio n s ) Revenue E ffo rt State Source: L o u is ia n a 3 is G e o r g ia , A l a b a m a , T e n n e s s e e , a n d M is s is s ip p i in th a t o rd er. Government $275 $4,000 Alabam a State Local 4.9 3.7 1.2 72.0 54.0 18.0 Florida State Local 8.7 6.2 2.5 126.8 90.0 36.8 G eorgia State Local 6.1 4.8 1.3 89.2 69.6 19.6 Lo uisian a State Local 6.1 5.0 1.1 88.8 73.2 15.6 M ississip p i State Local 3.7 2.8 .9 53.6 40.8 12.8 Tennessee State Local 5.1 2.9 2.2 74.0 42.0 32.0 T h e r a n k in g d o e s n o t n e c e s s a r ily in d ic a t e t h e r e la t iv e im p o r ta n c e o f th e s t a t e g o v e r n m e n t. F o r e x a m p le , th e sta te governm ent of fir st-r a n k e d F lo r id a c o lle c t e d o n ly 4 5 p e r c e n t o f a ll g e n e r a l revenues c o lle c te d F lo r id a in by g o v e r n m e n ta l u n its in 1 9 6 7 , w h e r e a s th a t o f b o tto m -r a n k e d M is s is s ip p i c o lle c te d a b o u t 5 9 p e r c e n t. T h e d if feren ce is p o rta n t in th a t sp e c ia l F lo r i d a , d is tr ic ts are th e ir e ffo r ts and m ore im ten d to 1D u e to r o u n d in g , th e s u m o f sta te n o t c o r r e s p o n d e x a c t ly t o t h e s t a t e 's t o t a l. and lo c a l m ay r a i s e t h e s t a t e g o v e r n m e n t ’s s h a r e . T h e sa m e e x p la n a tio n a p p lie s w h e n o n e c o n s i d e r s t h e r e l a t i v e l y h i g h p o r t i o n o f T e n n e s s e e ’s n ot ch an ge, to ta l s h a r e w h ic h g o e s to t h e lo c a l g o v e r n m e n ts . F l o r id a ( a b o u t $ 9 0 m i l l i o n t o t h e s t a t e a n d $ 3 6 .8 S p e c ia l d is tr ic ts are r e la tiv e ly u n im p o r ta n t in p r o v id e m illio n to lo c a l g o v e r n m e n ts ) th e g o v e r n m e n ta l stru ctu re o f T e n n e s se e . M a n y in M is s is s ip p i o f th e ir a n d $ 1 2 .8 m i l l i o n general tr a d itio n a l p u rp o se fu n c tio n s a r e c o n d u c te d c ity and c o u n ty by b etw een H ow g o v e r n m e n ts, (n e a r ly $41 $ 1 2 6 .8 m illio n in a n d $ 5 3 .6 m i l l i o n m illio n to th e sta te to lo c a l g o v e r n m e n t s ) . d o e s th e D is t r ic t c o m p a r e w ith th e rest a n d c o n s e q u e n tly th e s h a r e d u e to t h e s e a c t iv itie s o f th e c o u n tr y ? T h e r e v e n u e s h a r in g fu n d m u s t goes b e r a is e d th r o u g h to lo c a l g o v e r n m e n ts r a th e r th a n to th e s t a t e . S o m e o f t h e lo c a l g o v e r n m e n ts ’ im p o r ta n c e la r in a ls o m e n ts, r e s u lts fro m th e r e la tiv e ly le s s a c t iv e r o le o f th e s t a t e g o v e r n m e n t in T e n n e s s e e . I n 1967, F e d e r a l ta x e s. F o r e v e r y d o l rev en u e sh a red a d o lla r in w ith s u b n a tio n a l g o v e r n F ederal ta x es m u st be c o l le c te d . A s t a t e is b e tte r o f f o n ly i f m o r e r e v e n u e o n l y F l o r i d a ’s s t a t e g o v e r n m e n t r a i s e d a s m a l l e r is p ercen ta g e r e v e n u e s h a r i n g i s e n a c t e d i n t o la w , e a c h D i s t r i c t o f to ta l g en era l revenue (r a is e d a l l l e v e l s o f g o v e r n m e n t in t h e s t a t e ) th a n by d id w ith it th a n is c o lle c te d fro m it. If s t a t e w o u ld g a in fr o m s h a r in g b e c a u s e t h e p e r c e n t a g e o f s h a r e d r e v e n u e w h ic h e a c h s t a t e w o u ld T e n n e s s e e ’s . T h e s h a r e s a r e c o n v e r te d in to d o lla r a m o u n ts in T a b le 3 . I f $ 2 7 5 m illio n w e r e s h a r e d , p a y m e n t s r e c e iv e fo r M is s is s ip p i. P a s s th r o u g h pay is g re a te r th a n th e p er c e n ta g e of th e F e d e r a l ta x b ill w h ic h it p a y s ( T a b le 4 ) . w o u l d v a r y b e t w e e n $ 8 .7 m i l l i o n fo r F l o r id a a n d $ 3 .7 m i l l i o n sh ared E s s e n tia lly th e o f in c o m e fro m p la n in v o lv e s s t a t e s w ith lo w a tr a n sfe r r e v e n u e e ffo r ts m e n ts to lo c a l g o v e r n m e n ts w o u ld r a n g e b e tw e e n to $ 2 .5 m i l l i o n i n F l o r i d a a n d $ .9 m i l l i o n i n M i s s i s lo w -in c o m e sip p i. S ta t e g o v e r n m e n ts w o u ld b e le f t w ith b e e ffo r ts, tw een lo w e r r e v e n u e e f fo r ts . S in c e S o u th e a s te r n s t a t e s $ 6 .2 m illio n (F lo r id a ) and $ 2 .8 m illio n w ith 1 9 7 6 w o u ld , if s h a r e s d o A P R IL 1970 fo r t) h ig h sta tes and a r e g e n e r a lly ( M is s is s ip p i). A $ 4 -b illio n fu n d in sta te s reven u e ten d to h ig h -in c o m e lo w -in c o m e e ffo r ts . T y p ic a lly , h a v e h ig h e r r e v e n u e sta te s ten d to have (a n d h ig h -r e v e n u e e f s t a t e s , t h e y w o u ld g a in fr o m sh a r in g . I n a 53 T a b le 4 m ore g o v e r n m e n ta l s e r v ic e s . S econd to M is s is s ip p i in th e S o u th e a s t w o u ld b e L o u is ia n a w it h a C o m p a r is o n o f F e d e ra l T a x B ill a n d R e v e n u e S h a r e s fo r D is t r ic t S t a t e s g a i n o f $ .6 7 p e r c i t i z e n . F l o r i d a i s l a s t w i t h $ .2 1 p e r p e r s o n . I f $ 4 b illio n w e r e s h a r e d , t h e g a in s w o u l d b e p r o p o r t i o n a t e l y la r g e r . A s s u m i n g t h a t Percent Federal T a x B ill 1968 State ta x b u r d e n s a n d s h a r e s d o n o t c h a n g e , th e g a in Percent of Revenue Shared A lab am a 1.12 1.80 3.17 w o u ld b e a b o u t $ 1 2 .6 0 p e r p e r s o n in M is s is s ip p i. L o u is ia n a F lo r id a w o u ld w o u ld be seco n d g a in th e w ith about $ 9 .7 5 . le a s t — a b o u t $ 3 .1 0 per p erson . Florida 2.70 Georgia 1.68 2.23 Louisian a 1.32 2.22 M ississip p i .59 1.34 T h is Tennessee 1.40 1.85 p o s s ib le e f f e c t s o f F e d e r a l r e v e n u e sh a r in g . F o r O b s e r v a t io n s Sources: T a x Foundation, Inc., and Special A n a ly ses, Budget of the U nited States, Fiscal Y e a r 1971 d is c u s s io n e x a m p le , in an and does not e ffo r t to C o n c lu s i o n s a tte m p t to in c r e a s e cover th e ir a ll sh ared r e v e n u e s , in d iv id u a l s t a t e a n d lo c a l g o v e r n m e n ts m a y te n d to r e ly m u c h m o r e h e a v ily o n t a x a tio n in th e fu tu r e , r a th e r th a n b o n d fin a n c in g . W h ile th e s h o r t-r u n p o s s ib ilit ie s o f g a in s fr o m l i m i t e d s e n s e , t h i s w o u l d r e s u l t in h i g h e r i n c o m e s w it c h fo r S o u th e a s te r n s t a t e s . n a tio n a l U n le s s th e r e c e iv in g g o v e r n m e n ts cut th e ir g a in s m ay g o v e r n m e n t, are ta x e s , th e g a in s w o u ld n o t a c c r u e to c it iz e n s o f m a tic a lly a th e s t a t e in th e fo r m o f h ig h e r m oney in c o m e s . lo o k a ttr a c tiv e s lim . th e A ls o , su ch a to a p a r t ic u la r s u b chances a u to p la n , T h e y w o u ld b e in t h e fo r m o f m o r e g o v e r n m e n t m ay d e p e n d la r g e ly u p o n th e m a n n e r in w h ic h s t a t e th e a s s u m p tio n th a t th e p er w ith tim e . g o v e r n m e n ta l u n its se r v ic e s . U nder ch an ge do lo n g -r u n s h a r e u n d e r t h e A d m in is tr a t io n p u rp ose th e y of not r o le o f s p e c ia l s in c e T h e ir fu tu r e r o le m ay c e n t a g e d is t r ib u tio n o f t h e F e d e r a l t a x b ill h a s g o v e r n m e n ts c h o o s e to n o t c h a n g e d s in c e 1 9 6 8 , T a b le 5 sh o w s th e e s t i g o v e r n m e n t p a s s e s o n to th e m th e sh a r e d r e v e n u e m a te d p e r c a p ita g a in s w h ic h w o u ld accrue each s t a t e a s a r e s u lt o f sh a r in g . I f a $275 m illio n w ere sh a red , th e to to ta l o f g o v e r n m e n ts of M i s s i s s i p p i w o u l d r e c e i v e $ .8 6 p e r p e r s o n m o r e w h ic h a c c r u e s to tr e a t th e m . If th e sta te it a s a r e s u lt o f th e t a x a tio n e ffo r t o f th e s e s p e c ia l p u r p o se g o v e r n m e n ts , th e n su c h g o v e r n m e n ts a r e lik e ly to c o n tin u e to h a v e an i m p o r t a n t r o le i n o u r g o v e r n m e n t s t r u c t u r e . th a n M is s is s ip p ia n s w o u ld h a v e p a id in F e d e r a l D o u b tle s s , th e r e m ig h t b e n u m e r o u s o th e r s id e t a x e s to f in a n c e t h e r e v e n u e s h a r in g . T h e g a in to e f fe c ts o f r e v e n u e sh a r in g . B u t to b e c o m e o v e r ly M i s s i s s i p p i a n s i s $ .8 6 p e r p e r s o n in t h e f o r m o f concerned w ith th e se w o u ld o v e r lo o k th e ad v a n ta g e s o f s h a r in g a n d n e e d s o f s t a t e a n d lo c a l g o v e r n m e n ts . I f s u b n a t io n a l g o v e r n m e n ts a r e to p r o v id e fo r t h e n e e d s o f t h e ir c o n s t it u e n t s in t h e T a b le fu tu r e , 5 th e y p r o v id in g P e r C a p it a G a in s fro m R e v e n u e S h a r in g g iv e n n eed s. so m e a s s is ta n c e R evenue s h a r in g in is p r o b a b ly a s e f f ic ie n t a s a n y o th e r m e th o d w h ic h h as b een Size of F u n d to be D istributed State m u st b e th o se $275 M illio n $4,000 M illio n su g g ested . It is s im p le , d e fin ite , and e q u ita b le . T h e s a m e fo r m u la a p p lie s to a ll, a n d th u s, th e r e a p p e a r s to b e lit t le j u s t if ic a t io n fo r c o m p la in t s o f d is c r im in a to r y tr e a tm e n t, w it h t h e $ .52 $ 7.60 F lorid a .21 3.11 m e n ts . I n d e e d , it w o u ld b e a s ig n if ic a n t p a r t o f Georgia .33 4.83 th e a n sw e r to th e f is c a l d e f ic it, w h ic h lo o k in g lo c a l o f fic ia ls fa c e . I t is n o t a p a n a c e a , A labam a Lou isian a .67 9.74 M ississip p i .86 12.64 Tennessee .32 4.59 Source: Federal Reserve B a n k of A tlan ta 54 p o s s ib le b u t it is e x c e p tio n of s p e c ia l p u rp ose govern fo rw a rd - a p o t e n t ia lly la r g e a sp ir in . R obert H. F M O N TH LY loyd R E V IE W G e o rg ia 's E co n o m y J o g s A long The term jo g g in g h as been in w id e s p r e a d r e c e n tly , a n d to m o s t p e o p le th e te r m s lo w -m o v in g fo rw a rd pace— an u se G e o rg ia 's member banks outpaced the nation in the grow th of total loans, m eans a e x p r e s s io n th a t dep osits, and time deposits until late sum m er 1969. i s u s e d fr e q u e n tly b y t h o s e w h o d e s ir e to r e m a in in good d u r in g p h y s ic a l 1969 c o n d itio n . c o u ld be G e o r g i a ’s d e s c r ib e d econom y a c c u r a te ly by Year-Ago % Chg. t h is te r m , fo r t h e te m p o o f h e r e c o n o m y d id , in d e e d , s lo w dow n fr o m a r u n n in g p a c e in 1968 to a jo g in 19 6 9 . Banks and savings and the impact of shifting which in turn restricted funds to borrowers. The was adversely affected. loan institutions felt monetary conditions, the flow of available construction industry T IM E T im e d e p o s its sta r te d 1969. o n a d o w n h ill n o t e in T h e tr e n d c o n tin u e d th r o u g h o u t t h e y e a r , a lth o u g h t h e r a te o f d e c lin e s lo w e d in q u a r te r . L a ter, very D E P O S IT S r e c e n tly tim e d e p o s its have sh ow n th e la s t le v e lle d s ig n s of o ff and recovery. W h e n c o m p a r e d w ith U . S . m e m b e r b a n k s, t im e d e p o s its in G e o r g ia h e ld up b e tte r d u r in g th e fir s t n in e m o n th s o f 1 9 6 9 . A m ore s ig n ific a n t b a r o m e te r of s la c k e n in g e c o n o m ic a c t iv it y w a s t o ta l d e p o s it s . I n t h e fir s t e ig h t m o n th s o f 1 9 6 9 , to ta l d e p o s its h e ld u p b e tte r th a n n a tio n a lly , b u t a s th e y e a r d r e w to a c lo s e , p e r ie n c e t h e y c o m p a r e d le s s fa v o r a b ly . T h e tr e n d h a s c o n m a in e d tin u e d in to 1970. m ir r o r t h i s f a c t . A l l m o n t h l y l o a n f i g u r e s i n 1 9 6 9 Though upw ard th e w hen cost of le n d in g A P R IL 1970 b o r r o w in g in s titu tio n s fu n d s began p u sh ed to e x w ere in a liq u id it y stro n g above 1968, but in th e sq u eeze, G e o r g ia . c o r r e s p o n d in g lo a n g ro w th lo a n T o ta l dem and lo a n m o n th ly s lo w e d as re fig u r e s fig u r e s th e year 55 G eorgia em ploym ent indicators began to taper o ff after m id*1969. Seas. Adj.. 1957-59=100 1968 1969 1968 1970 1969 1970 *Seas. adj. figure; not an index p ro g ressed . The sa m e s itu a tio n w as g e n e r a lly tru e o f th e rest o f th e U . S. B anks G e o r g ia and d u r in g fu n d s s h r in k flo w s. s a v in g s and 1969 lo a n w a tch ed in s t itu t io n s th e ir a s a r e s u lt o f r e d u c e d N e v e r th e le s s , a lth o u g h s tr a p p e d th e th e s e ttle m e n t o f a n a u to d is p u te c a u s e d a s ig n ifi can t in lo a n a b le s a v in g s in c o n s tr u c tio n in c r e a s e in m a n u fa c tu r in g e m p lo y m e n t. B e g in n in g in e a r ly s u m m e r a n d s e r v in g a s a v iv id r e m in d e r of th e s lo w d o w n w a s a ta p e r in g -o ff in in b u ild in g c o n s tr u c tio n a c tiv ity e m p lo y m e n t. in d u s tr y , I n e a r ly 1 9 7 0 , o v e r a ll e m p lo y m e n t d e c lin e d s lig h t fo r f u n d s , m a d e a fa ir s h o w ly , a lth o u g h th e r a te o f u n e m p lo y m e n t r e m a in e d in g fo r t h e y e a r d e s p it e it s tr o u b le s. R e s id e n t ia l b e lo w th a t o f t h e D is t r ic t a n d t h e n a tio n . c o n s tr u c tio n c o n tr a c t a w a r d s m o d e r a te d u n til th e y e a r ’s f i n a l q u a r t e r , a l t h o u g h m e n t w a s n o te d in e a r ly a 1970. s lig h t im p r o v e A w ards fo r a ll o th e r t y p e s o f c o n s tr u c tio n fa r e d s o m e w h a t b e t te r fo r t h e y e a r a s a w h o le . B o o s tin g th e to ta l Georgia's growth of personal income in 1969 continued to outpace the nation's. o f o th e r c o n tr a c ts a w a rd e d w a s a D e c e m b e r a n n o u n c e m e n t o f a m a m m o th e le c tr ic p o w er s y s te m to b e c o n s tr u c te d in B a r to w C o u n ty . Alth ough the g ro w th of U .S. personal incom e slo w e d in 1969, the Peach Georgia employment continued to expand in the last year of the Sixties, but conditions be came more unsettled as 7 9 6 9 came to a close and 1970 began. S ta te 's rate of in cre ase did not. Seas. Adj., Qtrly. % Chg. G e o rgia N o n fa r m e m p lo y m e n t la st year d id not in c r e a s e a s s t e a d ily a s it d id in 1 9 6 8 . P a r tic u la r ly str ik in g w a s t h e ta p e r in g -o ff in jo b g r o w th a t t h e e n d o f 1 9 6 9 . M a n u fa c tu r in g a n d n o n m a n u fa c tu r in g e m p lo y m e n t, m a n u fa c tu r in g p a y r o lls , and a v e r a g e w e e k ly h o u r s fo r m a n u fa c tu r in g s h o w e d s lig h tly m o r e f lu c tu a t io n in T h is w a s e s p e c ia lly tr u e in 1 9 6 9 th a n in 1968. la te su m m er w hen a n in f lu x o f w o r k e r s fo r to b a c c o p r o c e s s in g a n d 56 Source: Department of Commerce M O N T H L Y R E V IE W T h is w a s in k e e p in g w ith t h e tr e n d o f p r e v io u s years. W ages and s a l a r ie s , w h ic h account The to b a cco h arvest w as up fr o m 1968, a l fo r th o u g h y ie ld p er a c r e a n d p r o d u c tio n w e r e d o w n in c o m e , fro m t h e p r e v io u s tw o y e a r s . C o tto n a n d s o y b e a n in c r e a s e d m o r e r a p id ly th a n in th e n a tio n a s a p r o d u c tio n a n d y ie ld p e r a c r e a ls o c lim b e d d u r w h o le . D u r in g t h e fo u r th q u a r te r o f 1 9 6 9 , G e o r in g 1 9 6 9 . over h a lf of G e o r g i a ’s to ta l p ersonal g i a ’s p e r s o n a l i n c o m e g r o w t h s p u r t e d p a s t m o s t o th e r S o u th e a ste r n e x p a n s io n in th e sta tes a n d n a t i o n ’s th e U. p erson al S . W h ile in c o m e has c o n t i n u e d t o t a p e r o f f i n 1 9 7 0 , G e o r g i a ’s p e r s o n a l in c o m e g ro w th s h o u ld , b a se d o n p a s t e x p e r ie n c e , o u tp a c e th e U . S. The agricultural sector of the state's economy gained as cash receipts from farm marketings climbed above a year ago. M ost crops regis tered increased production. The new year began in much the same way that 7969 ended, although as 1970 has pro gressed, it is evident that Georgia is under going an economic adjustm ent similar to that of the nation's. If, as many believe, these adjustments do not intensify by the second half of the year, Georgia should share in any pickup of national economic activity. G e o r g i a ’s G e n e r a lly , stro n g p r ic e s fo r c a ttle , a n d p e a n u ts e n a b le d eggs, h o g s, G e o r g ia beef in a e c o n o m ic la c k lu s te r in d ic a to r s m anner d u r in g have th e beh aved fir s t fe w fa rm e rs to m o n th s o f 1 9 7 0 . T h e p r o c e s s o f e c o n o m ic a d ju s t e n d t h e y e a r o n a b r i g h t n o t e . G e o r g ia , t h e l a r g e s t m e n t h a s b e e n v iv id ly p o r tr a y e d in m a n u fa c tu r U . S . p ro d u cer o f p e c a n s, h a r v e ste d a p e c a n cro p in g , s i n c e a u t o a s s e m b l y p l a n t s w e r e s h u t d o w n in 1 9 6 9 t h a t w a s g r e a te r t h a n in 1 9 6 7 a n d p r a c t i in c a lly t w ic e a s la r g e a s th a t o f 1 9 6 8 . H o w e v e r , th is its w o rk fo rce. A t a b o u t th e s a m e tim e , t h e F e d w as eral tr u e in m o st g ro w ers. F a v o r a b le u te d an to cases fo r S o u th e r n N ovem ber e x c e p t io n a lly good pecan e a r ly 1970 and govern m en t an n ou n ced ex pecan h a r v e st, s e c o n d o f t w o c o s t - c u t t in g m o v e s w h ic h b e g a n in 1 9 6 9 th a n in th e w in te r o f 1 9 6 9 . In su m m a ry , e v e n G e o r g i a ’s e c o n o m y G e o r g i a ’s it w ill s o o n jo g a lo n g a t a q u ic k e n e d p a c e — o n e th a t, b a se d o n p a s t e x p e r ie n c e , w ill c o n t in u e to tio n b e f a s t e r t h a n t h e n a t i o n ’s. c o n s id e r a b ly A lth o u g h th o u g h is c u r r e n tly u n d e r g o in g a n a d ju s tm e n t, h o p e fu lly o u tp u t in 1 9 6 9 e x c e e d e d o u tp u t in 1 9 6 7 , p r o d u c r e m a in e d 1969. of p e n d itu r e s a t G e o r g ia m ilit a r y in s t a lla tio n s , t h e R e d u c e d p e a c h h a r v e s t fo r th e C a r o lin a s a n d in r e d u c tio n c o n tr ib 1968. occurred a tr im m e d w ea th er o n e t h a t w a s 2 2 p e r c e n t la r g e r in G e o r g ia L o c k h e e d -G e o r g ia b e lo w th e h ig h of 1 9 6 8 . A m id -M a r c h c o ld sn a p , h o w e v e r , m a y p u t E a d a m p e r o n t h e 1 9 7 0 p e a c h o u tlo o k . m erso n A t k in s o n B a n k A n n o u n ce m e n ts On March 2, The B a n k of Collinw ood, Col Iinwood, Tennessee; The B a n k of W aynesboro, Waynesboro, Tennessee; M is s is s ip p i Southern Ban k, Port Gib son, M ississippi; Peo p les B a n k of Clifton, Clifton, Tennessee; and W ayne County Bank, Waynesboro, Tennessee— all nonmember banks— began to re mit at par for checks drawn on them when re ceived from the Federal Reserve Bank. Also on March 2, S e c o n d N atio n al B a n k of Delray B each, Delray Beach, Florida, opened for business as a newly organized member bank. Officers are Marshall M. DeWitt, chairm an; Frederick J. Teschke, president; Jesse M. Mikell, senior vice president; Richard B. Alsaker, vice president and cashier; and Helen M. Lee, assistant cashier. A P R IL 1970 Capital is $300,0 00; surplus and other capital funds, $450,000. C itizen s B a n k of C larkston, Clarkston, Georgia, a newly organized nonmember bank, opened for business on March 6. Officers are Ted A. Murphy, president; Hugh A. Horton, vice president; and P. Wayne Kidd, cashier. Capital is $ 2 0 0,0 00; surplus and other capital funds, $301,7 01. On March 17, The T a lla h a sse e B a n k North, Tallahassee, Florida, opened for business as a newly organized nonmember bank. Officers are T. N. Humphress, president; Gary C. Usina, execu tive vice president; and John Harlee, assistant cashier. Capital is $300,0 00; surplus and other capital funds, $250,0 00. 57 S ix t h D is t r ic t S t a t is t ic s S e a s o n a l l y A d ju s t e d (A ll d a ta a re in d e x e s , 1 9 5 7 - 5 9 = Latest Month 1970 One Two Month Months Ago Ago One Year Ago SIXTH DISTRICT INCOME AND SPENDING Personal Income (Mil. $, Annual Rate . Jan. . Jan. . Jan. . Jan. N.A. 252 175 153 203 N.A. 250 150 Instalment Credit at Banks* (Mil. $) New Loans ............................................... . Feb. . Feb. 122 202 N.A. 251 156 133 193 67,872 238 164 167 169 316 297 305 289 338 296 296 278 152 149 174 144 180 153 150 176 143 179 118 109 130 135 116 152 149 176 143 180 118 106 131 135 116 150 149 175 142 177 117 129 127 117 211 210 210 153 150 60 152 142 61 150 143 63 PRODUCTION AND EMPLOYMENT* . . . . . . . . . . . . . Manufacturing F o o d .................................................... Lbr., Wood Prod., Furn. & Fix. Textiles .................................... Transportation Equipment Unemployment Rate (Percent of Work Fori Insured Unemployment Avg. Weekly Hrs. in Mfg. (Hrs.) Construction Contracts* . . . Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. 129 132 115 199 153 144 60 110 Feb. 3.8 3.6 3.5 3.3 . Feb. . Feb. 2.3 40.0 246 246 246 166 103 236 2.3 40.3 439 318 542 167 103 232 1.9 40.8 292 332 258 166 98 238 2.2 . Feb. Electric Power Production* Cotton Consumption** . . 121 110 . Jan. . Jan. **Feb. 40.9 249 278 225 154 103 207 FINANCE AND BANKING . Feb. 342 287 342 289 339 286 309 267 . Feb. . Feb. Feb. 225 185 280 225 186 276 238 199 268 224 191 255 ALABAMA ± . Jan. . Feb. . Jan. N.A. 218 193 N.A. 218 143 N.A. 216 131 8,440 . . . . , Feb. Feb. Feb. Feb. Feb. 134 136 133 123 61 134 137 133 127 60 134 137 132 125 64 132 136 131 . Feb. . Feb. 4.0 40.5 3.8 40.5 4.0 40.8 3.8 41.1 . Feb. . Feb. . Feb. 311 213 249 306 248 306 218 238 276 213 233 Jan. Feb. Jan. N.A. 342 172 N.A. 335 172 N.A. 348 198 20,534 312 173 Feb. 176 177 177 172 201 150 PRODUCTION AND EMPLOYMENT Nonfarm Employmentt . . . . Manufacturing .......................... Nonmanufacturing . . . . C o n s t ru c tio n .......................... Farm Em ploym ent.......................... Unemployment Rate (Percent of Work Forcejf . . Avg. Weekly Hrs. in Mfg. (Hrs.) 122 64 FINANCE AND BANKING Member Bank L o a n s..................... Member Bank Deposits . . . Bank D e b it s * * ............................... 210 INCOME Personal Income Farm Cash R e c e ip ts ..................... Latest Month 1970 Manufacturing ................................ Nonmanufacturing.......................... C o n s tru c tio n ............................... Farm Em ploym ent............................... Unemployment Rate (Percent of Work Force)t • • . Avg. Weekly Hrs. in Mfg. (Hrs.) . One Two Month Months Ago Ago One Year Ago . . Feb. , , Feb. Feb. . . Feb. 179 176 141 85 178 175 138 91 178 176 134 93 , , Feb. . . Feb. 2.9 39.4 2.7 40.3 2.6 2 .6 41.4 41.6 . . Feb. Feb. . . Feb. 384 258 287 386 258 294 379 278 284 338 251 257 . . Jan. Feb. , Jan. N.A. 257 201 N.A. 255 189 N.A. 271 160 13,162 247 171 Feb. Feb. Feb. Feb. 153 141 158 150 52 154 145 159 155 56 153 145 157 151 59 146 144 153 154 54 Feb. Feb. 3.5 39.9 3.0 39.6 3.1 40.5 41.0 Member Bank L o a n s .......................... . . Feb. Member Bank Deposits..................... . . Feb. Bank D ebits**.......................................... Feb. 347 229 340 348 229 317 347 242 307 328 249 287 Jan. , Feb. Jan. N.A. 197 158 N.A. 199 136 N.A. 191 158 9.971 185 175 Nonfarm Employm entt..................... . . Feb. Manufacturing ............................... Feb. Nonmanufacturing ..................... Feb. C o n s tru c tio n ............................... Farm Em ploym ent.................................... Feb. Unemployment Rate (Percent of Work Force)t . . . . . Feb. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Feb. 134 124 136 134 50 134 124 136 155 45 133 136 133 50 133 124 136 142 58 5.6 41.4 5.4 42.5 5.1 41.2 4.7 40.9 . Feb. Feb. Feb. 282 177 203 277 176 217 281 186 204 253 177 188 Personal Income (Mil. $, Annual R a t e ) ..................... . Jan. Manufacturing Payrolls.......................... . Feb. Farm Cash R e c e ip ts ............................... . Jan. N.A. 270 190 N.A. 274 118 N.A. 261 126 4,951 263 186 . Feb. 152 160 148 175 57 152 161 148 183 54 150 160 148 160 50 149 162 146 155 58 Feb. . Feb. 4.3 40.0 3.9 40.9 3.8 40.7 3.7 41.1 416 271 300 425 277 284 408 279 264 375 254 254 180 170 132 95 FINANCE AND BANKING Member Bank L o a n s .......................... Member Bank Deposits..................... Bank D ebits**.......................................... GEORGIA * INCOME Personal Income (Mil. $, Annual Rate) . . . . Manufacturing Payrolls . . . . Farm Cash R e c e ip ts .......................... PRODUCTION AND EMPLOYMENT Nonfarm Employmentt . . . . Manufacturing ............................... Nonmanufacturing.......................... . . C o n s tru c tio n ............................... Farm Em ploym ent............................... Unemployment Rate (Percent of Work Force)! . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . 2 .6 FINANCE AND BANKING LOUISIANA INCOME Loans* Personal Income (Mil. $, Annual I O O , u n le s s in d ic a te d o th e r w is e .) PRODUCTION AND EMPLOYMENT 58 Personal Income (Mil. $, Annual Rate) . . . . Manufacturing P a y ro lls ..................... Farm Cash R e c e ip t s ..................... PRODUCTION AND EMPLOYMENT 12 2 FINANCE AND BANKING Member Bank L o a n s * .......................... Member Bank D e p o s its * ..................... Bank D ebits*/**.......................................... MISSISSIPPI INCOME PRODUCTION AND EMPLOYMENT Nonfarm Em ploym entt.......................... Manufacturing ..................................... Nonmanufacturing............................... C o n s tru c tio n ..................................... Farm Em ploym ent..................................... Unemployment Rate (Percent of Work Force)t . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . , Feb. . Feb. FINANCE AND BANKING Member Bank L o a n s * .......................... Member Bank D e p o s its * ..................... Bank D ebits*/**.......................................... M O N T H L Y R E V IE W Latest Month 1970 One Year Ago One Two Month Months Ago Ago Nonmanufacturing............................... C o n s tru c tio n .................................... Farm Em ploym ent.................................... Unemployment Rate (Percent of Work ForceJt . . . . Avg. Weekly Hours in Mfg. (Hrs.) . TENNESSEE t INCOME Personal Income (Mil. $, Annual Rate) . . . . Manufacturing Payrolls..................... . . Feb. Farm Cash R e c e ip ts .......................... . . Jan. N.A. 245 121 N.A. 242 116 N.A. 248 147 10,815 236 121 151 157 151 157 149 157 150 158 . Feb. One Two Month Months Ago Ago On* Year Ago . Feb. 148 170 63 148 174 62 145 165 62 146 169 63 . Feb. . Feb. 3.7 39.8 3.9 39.9 3.6 40.4 3.1 40.4 Member Bank L o a n s * .......................... . Feb. Member Bank D e p o sits * ..................... . Feb. Bank D ebits*/**......................................... 325 203 273 325 203 262 319 213 273 293 190 295 FINANCE AND BANKING PRODUCTION AND EMPLOYMENT Nonfarm Employm entt..................... . . Feb. Feb. Manufacturing ............................... Latest Month 1970 r-Revised *For Sixth District area only; other totals for entire six N.A.states Not available **Daily average basis tEmployment figures for Alabama, Florida, Georgia, and Tennessee have been adjusted to new bench mark data. Sources: Personal income estimated by this Bank; nonfarm, mfg. and non mfg. emp., mfg. payrolls and hours, and unemp., U.S. Dept, of Labor and cooperating state agencies; cotton consumption, U.S. Bureau of Census; construction contracts, F. W. Dodge Div., McGraw-Hill Information Systems Co.; petrol, prod., U.S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. D e b it s t o D e m a n d D e p o s it A c c o u n t s In s u r e d C o m m e r c ia l B a n k s in th e S ix t h D is t r ic t (In T h o u s a n d s o f D o lla r s ) Percent Change February 1970 January 1970 February 1969 Year to February date 1970 2 mos From 1970 Jan. Feb. from 1970 1969 1969 STANDARD METROPOLITAN STATISTICAL AREASt Birmingham . . . . 1,875,881 Gadsden ..................... 65,731 Huntsville . . . . 214,847 Mobile ..................... 574,749 Montgomery . . . 336,355 Tuscaloosa . . . 115,338 2,011,268 70,472 236,079 672,506 386,720 129,262 1,706,222 57,541 168,182 540,854 361,645 112,129 - 7 - 7 - 9 -1 5 -13 -11 + 10 + 14 +28 + 6 - 7 + 3 + 7 + 8 + 19 + 9 - 1 + 1 Ft. Lauderdale— Hollywood . . . Jacksonville . . . M ia m i.......................... O r la n d o ..................... Pensacola . . . . Tallahassee . . . Tampa—St. Pete. . W. Palm Beach . . 1,049,022 2,000,832 3,328,016 740,216 222,128 201,461 2,047,331 666,037 1,282,452 1,980,985 4,041,729 856,716 254,932 193,015 2,496,828 797,560 1,017,248 1,644,496 3,097,063 663,003 206,330 179,875 1,695,669 595,887 -1 8 + 1 -1 8 -1 4 -1 3 + 4 -1 8 -1 6 + 3 +22 + 7 + 12 + 8 + 12 +21 + 12 + 7 + 9 + 10 + 14 + 7 + 13 + 18 + 16 Albany ..................... Atlanta ..................... A u g u s t a ..................... Columbus . . . . Macon ..................... Savannah . . . . 106,361 7,445,020 292,470 247,922 282,392 270,277 124,207 7,708,432 327,949 282,919 332,604 357,495 99,787 5,968,418 270,440 257,613 292,878 291,733 -1 4 - 3 -11 -1 2 -1 5 -25 + 7 +25 + 8 - 4 - 4 - 7 + 8 +22 + 7 + 0 + 2 - 1 Baton Rouge Lafayette . . Lake Charles . New Orleans . . . . . . . . . 757,320 154,679 157,684 2,497,335 891,666 184,699 192,231 2,974,312 645,205 140,995 152,976 2,357,991 -1 5 -1 6 -1 8 -1 6 + 17 + 10 + 3 + 6 +26 + 3 + 1 + 6 Biloxi—Gulfport . . Jackson ..................... 164,522 871,804 158,581 864,755 117,892 692,561 + 4 + 1 +40 +26 +29 +20 Chattanooga . . . Knoxville . . . . Nashville . . . . 760,908 504,657 1,777,274 871,470 586,013 1,897,973 662,186 496,835 2,296,192 -13 -1 4 - 6 + 15 + 2 -23 + 14 - 1 -2 2 A n n is to n ..................... Dothan ..................... S e l m a .......................... 68,288 83,897 48,136 80,379 89,184 50,983 71,355 71,291 50,332 -1 5 - 6 - 6 - 4 + 18 - 4 - 0 + 15 - 3 ..................... Bartow Bradenton . . . . Brevard County . . Daytona Beach . . Ft. Myers— N. Ft. Myers . . 35,716 99,370 199,880 94,128 49,175 114,391 269,981 117,082 37,465 95,284 218,094 88,082 -27 -13 -26 -2 0 + + + 125,732 146,096 128,788 -1 4 OTHER CENTERS •Includes only banks in the Sixth District portion of the state A P R IL 1970 5 4 8 7 - 2 4 2 7 8 - 1 tPartially estimated Percent Change February 1970 From Jan. Feb. 1970 1969 Year to date 2 mos. 1970 from 1969 February 1970 January 1970 Gainesville . . . . Lakeland . . . . Monroe County . . O c a l a .......................... St. Augustine . . . St. Petersburg . . S a r a s o ta ..................... Tampa ..................... Winter Haven . . 107,148 161,296 43,299 95,699 21,459 414,495 197,822 1,126,085 89,987 117,729 190,555 42,867 105,970 27,811 518,958 211,768 1,343,323 106,736 98,161 134,481 38,875 73,776 23,632 393,962 148,272 890,050 82,573 - 9 -1 5 + 1 -1 0 -23 -2 0 - 7 -1 6 -1 6 + 9 +20 + 11 +30 - 9 + 5 +33 +27 + 9 +12 +24 - 0 +30 - 8 + 5 +26 +25 + 17 Athens ..................... Brunswick . . . . Dalton ..................... E lb e r to n ..................... Gainesville . . . . G r if f i n .......................... LaGrange . . . . Newnan ..................... R o m e .......................... V a ld o s ta ..................... 92,077 53,585 97,909 18.482 80,345 39,972 21,734 27,456 81,608 61,268 108,258 60,583 112,753 16,749 105,835 44,215 24,036 28,874 96,742 68,774 84,872 45,107 104,311 14,318 66,686 34,868 22,153 22,636 75,550 58,154 -1 5 -1 2 -13 + 10 -2 4 -1 0 -1 0 - 5 -1 6 -11 + 8 + 19 - 6 +29 +20 + 15 - 2 +21 + 8 + 5 + 6 + 14 - 9 +12 +28 + 14 - 3 + 17 + 9 + 9 Abbeville . . . . Alexandria . . . . Bunkie ..................... Hammond . . . . New Iberia . . . . Plaquemine . . . Thibodaux . . . . 11,657 149,761 6,318 44,688 37,487 15,040 23,519 18,134 179,255 9,166 44,979 47,715 18,472 35,321 11,570 158,502 6,792 39,003 38,671 13,674 21,741 -3 6 -1 6 -31 - 1 -21 -1 9 -3 3 + 1 - 6 - 7 + 15 - 3 + 10 + 8 + 1 - 4 - 1 + 9 + 0 + 13 + 1 Hattiesburg . . . L a u r e l .......................... M e rid ia n ..................... Natchez . . . . Pascagoula— Moss Point . . Vicksburg . . . . Yazoo City . . . . 52,698 45,502 70,507 39,384 58,595 55,295 85,509 45,232 65,256 42,658 69,615 42,646 -1 0 -1 8 -1 8 -13 -1 9 -1 9 + 7 +21 + 1 + 3 - 8 + 1 78,573 47,677 23,493 79,896 51,457 26,881 68,150 38,901 31,787 - 2 - 7 -13 + 15 +23 -25 + 4 + 13 -2 4 Bristol ..................... Johnson City . . Kingsport . . . . 83,981 91,964 156,624 94,967 103,101 172,872 77,870 79,192 173,592 -1 2 -11 - 9 + 8 + 16 -1 0 + 6 + 12 - 8 39,413,017 44,339,165 5,201,051 4,678,452 13,040,154 15,232,468 10,730,806 11,485,262 5,362,228 4,497,183 1,926,278 1,817,018 4,649,404 5,131,878 35,864,276 4,376,244 11,683,239 9,068,961 4,174,360 1,538,287 5,023,185 -11 -1 0 -1 4 - 7 -1 6 - 6 - 9 + 10 + 10 + 7 + 7 + 12 + 12 + 18 + 16 + 8 + 8 + 18 + 15 - 7 - 8 SIXTH DISTRICT, Total Alabama?: . . . . F lo r i d a ? ..................... Georgia): . . . . Louisianat* . . • . Mississippi?* • • ■ . Tennesseet* . • . . {Estimated February 1969 r-Revised 59 D is t r ic t B u s in e s s C o n d it io n s As new data appear, their message is unm istakable: Econom ic slowdown continues. February brought declines in nonfarm employment and in the m anufacturing workweek. The unemployment rate rose again. Consumer credit activity increased only marginally. Auto sales remained sluggish. Bad weather beset farmers. Sharp gains in specific markets, nevertheless, put plus signs in front of January construction contract indices. In banking, the March prime rate reduction accompanied a lessening of reserve pressures, a lessening caused partly by rebounding consumer-type time deposits. February employment indicators document the slowdown. N o n f a r m e m p l o y m e n t f e l l a g a i n , c a u s reduce to b a cco acreage. P r ic e s of m o st fa r m p r o d u c ts a r e h o ld in g u p w e ll. L a y o ffs , r a th e r th a n n e w e n tr a n ts in to th e w o r k Construction data show gains that look boomy, but these were concentrated in only a few markets. in g th e u n e m p lo y m e n t r a te to in c r e a s e o n c e m o re. fo r c e , r a is e d t h e u n e m p lo y m e n t r a te . T h e a v e r a g e A la b a m a a n d m a n u fa c tu r in g w o r k w e e k , a s ig n if ic a n t e c o n o m ic c o n s tr u c tio n b a r o m e te r , f a ile d to in c r e a s e in fo u r o f t h e fiv e fic ie n tly sta te s r e p o r tin g . ( In th e fifth th e in c r e a s e w a s s m a ll.) up s lig h tly in r e s p o n s e s t a t e — G e o r g ia — D o lla r p a y r o lls m o v e d to c o n tin u e d w age in creases. a u to s a le s r e m a in e d in lo w g e a r d e s p it e in te n s iv e m a r k e tin g e ffo r ts b y th e a u to in d u s tr y . I n d ic a tio n s a r e th a t d e p a r tm e n t s to r e s a le s c o n tin u e d th e ir s lu g g is h p a c e in M a r c h . Weather hit fruit and vegetable crops with a one-two punch, as an unusually warm spell gave way to freezing temperatures. T h e f r e e z e n i p p e d o ffse t sh arp c o n s tr u c tio n in January, d e c lin e s in e ls e w h e r e . Sharp la r g e p la n t w h ic h su f n o n r e s id e n tia l r e s id e n tia l con s tr u c tio n d e c lin e s in L o u is ia n a , M is s is s ip p i, a n d A la b a m a w e r e m o r e th a n m a d e u p b y c o n t in u e d g a in s in Outstanding consumer credit at commercial banks inched upward in February, largely because of increases in two categories— personal loans and auto loans purchased from dealers. F e b r u a r y T en n essee an n ou n ced c o n tr a c ts F lo r id a . S tr e n g th co n cen tra ted — th e so n v ille , a n d W est la r g e in c r e a s e s in in T a m p a -S t. P a lm F lo r id a w a s a ls o P e te r sb u r g , B each areas Jack r e p o rte d c o n tr a c t v o lu m e . T h e s in g le fa m ily r e s id e n tia l c o n s tr u c tio n se c to r is s t ill r e s t r a in e d b y th e s h o r t a g e o f m o r tg a g e c r e d it, h o w e v e r , a n d p r e lim in a r y d a ta in d ic a t e t h a t s a v in g s flo w s in to m o r tg a g e -o r ie n te d th r ift in s titu tio n s in c r e a s e d v e r y l it t le in F e b r u a r y . A prime rate reduction to eight percent was the big banking news in March; almost all major banks have joined in the national markdown. In F ebruary, th e in te r e s t ra te on sh o r t-te r m m a n y e a r ly p e a c h v a r ie t ie s in th e b u d , a n d it a ls o b u s in e s s lo a n s a t la r g e D is t r ic t b a n k s d a m a g e d L o u i s i a n a ’s t e n d e r y o u n g s t r a w b e r r i e s . changed W h e r e i t w a s n o t c o l d , i t w a s w e t : B e a t i n g r a in s h a v e b e e n u n d e r le s s r e s e r v e p r e ssu r e , p a r tly b e cau sed cau se of a M arch e r o s io n ; h e a v y m o is tu r e im p e d e d sp r in g fro m R e c e n tly , r e s u r g e n c e in in g s th r o u g h th e m id -M a r c h c o r p o r a te ta x d a te . so y b ea n s, 60 and p e a n u ts and to dem and la tte r c o n su m e r -ty p e t im e c o tto n , Loan w as un th e p la n tin g . D is t r ic t fa r m e r s p la n to in c r e a s e p la n t of d e p o s its . N ovem ber. r e m a in e d stro n g MONTHLY REVIEW APRIL 1970