The state gets the bulk of its revenue from taxes on income and sales, and experts traditionally consider gains in those two areas a good sign for the economy.

Overall, the revenue the state took in was up 8.5% — or $180 million — over August 2021, but even that was lower than it would normally be because Kemp is continuing to suspend collections of the state’s gas tax to stem the impact of higher fuel prices.

That decision saved drivers, and cost the state, more than $170 million in August. Motor fuel money goes to road and bridge projects, and Kemp is replacing the taxes earmarked for that purpose with leftover surplus funds.

The news for August comes two months after the state reported it ended its fiscal year on June 30 about 23% — or $6.19 billion — ahead of last year. That means another big surplus for the state, and Kemp has already proposed refunding about $2 billion of it to taxpayers.

The taxes the state collects help it educate 2 million children, provide health care to more than 2 million Georgians, manage and improve parks, investigate crimes and incarcerate criminals, and regulate insurance firms, utilities and dozens of professions. The state issues driver’s licenses and helps pay for nursing home care for the elderly.

The state is a major provider of treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the COVID-19 pandemic. Besides paying salaries, it helps make sure that hundreds of thousands of former teachers, university staffers and state employees receive pensions and health care.

State income tax collections have been on the rise for the past few years, since shortly after the beginning of the COVID-19 pandemic, when Congress first passed massive federal aid spending. Inflation has helped boost sales tax collections, with goods costing more and the taxes on them rising, and wages have also increased as unemployment hit record lows and businesses scrambled to fill job openings.

With the help of massive federal COVID-19 aid, the state ended fiscal 2021 with a $3.7 billion surplus. During the 2022 General Assembly session, lawmakers approved refunding about $1.1 billion or so of that to taxpayers. Much of the rest was put into state reserves.

Stacey Abrams, the Democratic nominee for governor facing Kemp in November, has said if elected, she will spend some of the fiscal 2022 surplus to give raises to teachers and law enforcement officers and pay for an expansion of Medicaid, the health program for the poor and disabled, to cover more people. She also would refund some of it to taxpayers.

Georgia tax collections

The state of Georgia’s tax collections for August, compared with August 2021:

Source: Georgia Department of Revenue

* Gov. Brian Kemp has suspended gas tax collections