Drop in power sales cuts TVA tax payments
Reduced demand for electricity amidst the COVID-19 pandemic caused TVA’s power revenue to fall by $1 billion in fiscal 2020, cutting the utility’s tax-equivalent payments by $52 million.
A study by the Tennessee Advisory Commission on Intergovernmental Relations released Friday estimates that TVA’s tax-equivalent payments in Tennessee will drop by more than 9%, or $33 million this year, to $340 million.. For the state’s 2020-21 fiscal year, allocations will decrease by $7.5 million for counties, by $3.2 million for cities, and by $11.6 million for state agencies.
TVA makes payments in lieu of taxes (PILOT) to the eight states in which it owns power property, based on 5% of its prior-year proceeds from power sales. The tax-equivalent payments are divided among the states based on each state’s share of power sold by TVA and the value of TVA property located in each state.
Hamilton County Assessor adds business assets filing option
The Hamilton County Assessor’s office has added an online filing option for Personal Property Reports (business assets) that business owners must report to the Assessor of Property each year. The reports are due no later than March 1.
Hamilton County Assessor Marty Haynes stated said the new web-based reporting option “will allow my office to be more efficient, which will ultimately save taxpayer dollars.” Each business will have a security PIN for their specific report, Haynes said. Businesses may access the online filing system at www.hamiltontn.gov/AssessorOfProperty.aspx and follow the link.
Haynes noted this is the fourth major technology upgrade since he was elected in 2016. The Hamilton County Assessor of Property office earned the Three Star Certification from the TN Assessor’s Association in 2019.
Wages rise 2.6% for all of 2020
Wages and benefits for U.S. workers rose in the last quarter of the year, putting all of 2020 in somewhat of a normal range as the pandemic continued to rankle the economy.
Total U.S. workers compensation rose 0.7% in the October-December quarter, an increase over the previous two quarters, the Labor Department said Friday. For all of 2020, wages and benefits grew 2.5%, with wages and salaries up 2.6% and benefits, which include Social Security, which grew 2.3%.
The data comes from the Labor Department’s Employment Cost Index, which measures pay changes for workers that keep their jobs. The data isn’t affected by the mass layoffs in the spring.
While employers are limiting increases in compensation, most are reluctant to cut pay outright.
“Overall, compensation costs are likely to remain subdued going forward, reflective of a high level of unemployment that will restrain wages,” said Rubeela Farooqi, economist with High Frequency Trading.
Caterpillar sales drop 15% last year
Caterpillar’s fourth-quarter sales dropped 15% as an unchecked pandemic continued to sap demand for big machinery, but the damage was not as bad as most had expected.
Sales were $11.24 billion, down significantly from last year’s $13.14 billion, yet far better than Wall Street projections of $11.18 billion, according to a survey of analysts by Zacks Investment Research.
Construction sales fell 16% in North America and they were basically flat in Europe, Africa, and the Middle East.
The Deerfield, Illinois, company earned $780 million, or $1.42 per share, in the quarter. Excluding one-time charges, however, per share earnings were $2.12, which is 66 cents better than industry analysts had expected.
That is still well below the $1.1 billion, or $1.97 per share, that the company earned in the prior year.
Consumer spending falls 0.2% last month
U.S. consumers slowed their spending by 0.2% in December, cutting back for a second straight month in a worrisome sign for an economy struggling under the weight of a still out-of-control pandemic.
The decline reported Friday by the Commerce Department followed a seasonally adjusted 0.7% drop in November. It was the latest sign that consumers, whose spending is the primary driver of the U.S. economy, are hunkered down and avoiding traveling, shopping and dining out. Since making a brief bounce-back from the viral pandemic last spring, consumer spending has barely grown. Sales at retailers have declined for three straight months.
Friday’s report from the government also showed that personal incomes, which provide the fuel for spending, rose a modest 0.6% after two months of declines. Yet Americans who have been fortunate enough to keep their jobs have been largely stockpiling savings rather than spending. That could bode well for the economy later this year, once consumers feel more willing and are more able to spend.
– Compiled by Dave Flessner