Tax collections in Georgia shot up nearly 9 percent in May despite lagging sales tax growth with the end of the “birthday tax” on vehicles.
Yet Georgia is far from in the financial clear, as a growing population is driving a need for ever higher education and health spending.
Tax collections grew by $106 million, or 8.6 percent, compared with the same month last year. That makes for an overall increase of 6.3 percent for fiscal year 2013.
“This shows the state’s economy is strengthening, and in recent months we’ve seen higher percentages of growth than we’ve seen in the past two years,” Gov. Nathan Deal said. “That means more Georgians are on payrolls and that more people feel confident enough to spend money on goods and services.”
The May growth was fueled by individual income tax collections that jumped by about $38 million and corporate income tax receipts that soared roughly $19 million.
That helped offset sales tax collections that dropped by about $30 million from May 2012. Part of the reason for the plunge is the new law that took effect in March that requires new vehicle owners to pay a one-time upfront title fee of 6.5 percent of the vehicle’s value rather than an annual tax.
As the tax coffers swell, Deal offered a note of caution, saying he will “budget conservatively as we continue to face pressures from increased spending on k-12 education and Medicaid.”
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