With the next General Assembly session a month away, legislative budget writers got good news Tuesday when the state announced tax collections were up again in November, despite an uptick in COVID-19 cases.
Even with growing concern about another wave of the pandemic, Georgia’s economy continues to show growth over the first half of fiscal 2021, which began July 1. The overall tax take was up 8.3% in November over the same month last year. Collections are running $551 million ahead of last year through the first five months of the fiscal year.
That’s important for Gov. Brian Kemp and budget writers, who will decide how much money areas ranging from k-12 and college education agencies to the Georgia State Patrol, road construction and health care programs will receive in the coming year.
Through Georgia’s budget, taxpayers help educate 2 million children, provide health care to more than 2 million Georgians, build roads and bridges, manage parks, investigate crimes and incarcerate criminals, and regulate insurance firms and utilities, along with 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 basic medical coverage and treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the pandemic.
Besides paying salaries, it also helps make sure that hundreds of thousands of former teachers, university staffers and state employees receive pensions and health care.
In November, individual income tax collections were up 14.3% and the gross sales tax take improved 6% over November 2019. The state gets most of its revenue from sales and income taxes, and gains in the two taxes generally suggest a growing economy.
Credit: Alyssa Pointer / Alyssa.Pointer@ajc.com
Credit: Alyssa Pointer / Alyssa.Pointer@ajc.com
Alcoholic beverage tax collections were up 5.2%, continuing a trend that started with the pandemic. That area may be getting a boost from the recent startup of home delivery of alcoholic beverages under a law legislators passed in June, although many of the big retailers have yet to start the service.
On the other hand, the revenue report showed how much the hospitality industry — especially hard hit by the pandemic — continues to struggle. Hotel/motel fees were off almost 30%, continuing a trend that began in March.
Still, overall, the news for the state so far this fiscal year is better than Kemp and many lawmakers expected in June, when they passed a budget that cut more than $2 billion in spending — including $950 million in basic k-12 school funding.
The governor has remained relatively optimistic that the state will see a quick recovery from the COVID-19 recession in 2021, and he told state agencies they wouldn’t have to endure more budget cuts next year. In fact, agencies requested more than $700 million in new spending next year.
Kemp has also continued to tout business expansions in the state, telling lawmakers Monday that “we are on pace to beat record after record, amazingly, in the middle of a pandemic, with more than 12,600 new jobs announced and $4.45 billion in new investments from the start of the new fiscal year until the end of November.”
Georgia’s rising revenue
State tax collections have improved since the start of summer, despite the ongoing COVID-19 pandemic. Below are the collections for November, and the first five months of the fiscal year, which began July 1
November
Individual income tax collections: +14.3%
Gross sales tax collections: +6%
Motor fuel taxes: +1.6%
Tobacco taxes: +11.6%
Alcohol taxes: +5.2%
Fiscal 2021, five months in
Individual income tax collections: +10.7%
Gross sales tax collections: +5.8%
Motor fuel taxes: -0.1%
Tobacco taxes: +8.7%
Alcohol taxes: +13.4%
Source: Georgia Department of Revenue
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