The state of Georgia saw a big bump up in tax collections in May, signalling that the government will likely end the fiscal year on June 30 with a sizable surplus.
Overall tax collections were up 10.3 percent in May, Gov. Nathan Deal announced Monday. Through 11 months of the fiscal year, they are ahead of last year by 4.7 percent, or almost $900 million.
The state saw a big increase in individual income tax collections (17.6 percent) and corporate income tax collections (23.2 percent). Corporate tax collections have been in the tank for several months.
In addition, net sales tax collections improved 3.5 percent over May 2016.
Rising income and sales tax collections are generally seen as a good sign for the state’s economy. State officials say it shows Georgians are earning and spending more.
A surplus would be good news for Deal, who vowed to leave his successor at least a $2 billion rainy day reserve when he leaves office in 2019. The governor met that last summer, and he has now reset his goal to $2.5 billion. That amounts to about what it would take to run the state for almost a month.
Big reserves also are important in helping the state keep its AAA bond rating, which allows the government to borrow money at low interest rates. That saves the state millions of dollars a year in interest payments.
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