After three months in the dumps because of the COVID-19 recession, Georgia tax collections jumped in July.
The revenue report put out by Gov. Brian Kemp’s office also showed fiscal 2020, which ended June 30, wasn’t as bad as many people thought.
The positive report comes three months into the reopening of Georgia’s economy following the pandemic shutdown. However, the state saw a spike in COVID-19 cases over the summer.
Budget writers say it’s unclear whether the strong fiscal showing will last.
“The tale of the tape will be in the next month or so,” House Appropriations Chairman Terry England, R-Auburn, said during a recent budget forum.
For July, the first month of the fiscal year, collections were up 17% over July 2019, with big gains in both income tax and sales tax collections.
Income tax collections have been bolstered by tax withholding on unemployment checks, which the federal government had, until recently, been boosting with $600-a-week supplements.
With so many Georgians out of work because of the pandemic recession and the federal government adding to unemployment checks, the state is collecting $120 million or more a month in income tax withholding from the unemployed, versus the $1 million to $5 million that more typically comes in.
The federal government’s extra payments for unemployment have expired, and it’s unclear when — or if — they will come back.
The state initially reported collecting about $1 billion less in the fiscal year that ended June 30. But Friday’s report said it finished the year only $92 million short because the state included income taxes paid in July that would have been due April 15.
At the start of the pandemic, Kemp decided to move the day income taxes were due from the traditional April 15 to July 15. So many Georgians who would normally pay in April — in fiscal 2020 — paid in July, which fell in fiscal 2021.
The state still wound up with less money than it was hoping to raise to do things such as pay teacher salaries, fund universities and the Georgia State Patrol, build and maintain highways, and inspect food.
Lawmakers in June passed a fiscal 2021 budget that cut $2.2 billion — including $950 million in basic aid to school systems. The Atlanta Journal-Constitution reported Thursday that for fiscal 2022, which begins next July 1, Kemp is not asking for new spending reductions.
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