While the nation hears constant talk of a recession, Georgia tax collections in July remained strong, signaling a still-growing economy here, state officials said Friday.
Personal income tax collections were up 10.7% over the same month last year, while gross sales taxes improved 11.7%.
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. Higher prices due to inflation padded the sales tax numbers somewhat.
The news, released by Gov. Brian Kemp and the Georgia Department of Revenue on Friday, came hours after the U.S. Bureau of Labor Statistics reported the addition 528,000 jobs in July nationally as the labor market continued to defy worries about inflation and a recession.
Overall, the revenue the state took in was up only 2.5% — or $54 million — over July 2021, but that was largely a function of Kemp’s decision to continue suspending collections of the gas tax to stem the impact of high fuel prices.
That decision saved drivers, and cost the state, more than $150 million in July. 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 July comes a month after the state reported it ended its fiscal year on June 30 about 23% — or $6.19 billion — ahead of last year. That will mean another big surplus for the state and Kemp is expected to propose refunding at least part of that money 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 since shortly after the beginning of the 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 also rising.
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 of that to taxpayers. Much of the rest was put into state reserves.
Stacey Abrams, the Democratic nominee for governor, 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.
Georgia tax collections
The state of Georgia tax collections for July, compared to July 2021:
- Individual income taxes: Up 10.7%
- Corporate income taxes: Up 62.3%
- Gross sales taxes: Up 11.7%
- Motor fuels taxes: Down 97.8%*
- Hotel/motel fees: Up 15%
Source: Georgia Department of Revenue
* Gov. Brian Kemp has suspended gas tax collections
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