Barely a week after Gov. Brian Kemp announced he would let agencies ask for spending hikes in the coming year, July revenue numbers backed up his optimism about the state’s fiscal health.
State tax collections were up 13.1% for July — the first month of the fiscal year — over July 2022, largely because this time last year the state wasn’t collecting gas taxes, which Kemp suspended to lower fuel prices. Excluding money raised in July from gas taxes, revenue was up 5%.
That comes after the state ended the past fiscal year June 30 with a more than $5 billion surplus. Which came a year after the state ended its fiscal year with a $6.6 billion surplus.
It was clear from the Office of Planning and Budget’s spending instructions to agencies last week that the administration is bullish on the state’s economy.
Kemp told state agencies last week that they can request up to 3% worth of enhancements to their budgets in the coming year, a break from the past, when governors were reluctant to suggest spending boosts.
State tax collections had been on a bit of a losing streak in recent months. The most recent surplus was due in large measure to Kemp’s extremely conservative estimates for tax collections, which the state exceeded.
For July, collections ran about $290 million ahead of July 2022. Of that, almost $180 million of the increase came from fuel taxes.
Income tax collections were up 7.8%, which accounted for most of the rest of the improvement last month, but gross sales tax collections only gained 1.2%.
Income and sales taxes make up the majority of the state’s revenue to pay for K-12 schools, colleges, public health care, prisons, policing, business regulation and a host of other services.
Kemp on Thursday also announced Georgia State University’s Robert “Bob” Buschman will become the new state fiscal economist on Sept. 1.
Buschman currently serves as interim director of the Public Finance Research Cluster at GSU. He replaces Jeffrey Dorfman, a longtime University of Georgia economist who took a job at North Carolina State University.
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