Tax collections continue to point to growth in Georgia’s economy

Income and sales tax collections were both up in November, signs that Georgians have more money to spend. Corporate income tax collections are up 11.5 percent for the first five months of the year.

The Atlanta Journal-Constitution reported last week that Georgia has had one of the fastest rates of revenue growth in the country. Many states, particularly in the middle of the country, have seen declining collections, and lawmakers in those states may have to vote on new budget cuts in coming months.

Nationally, tax collections were off 2.1 percent during the second quarter of the year, according to a new report by the Nelson Rockefeller Institute of Government, the public policy research arm of the State University of New York, and they haven't improved much since then.

Fiscal economists say collections can be an indicator of the strength or weakness of the economy. In general, if a state hasn’t changed tax rates and its sales and income tax collections are down, so is its economy. The opposite is also true, which is why the report is good economic news for Georgia.

Deal touted Georgia’s economic and fiscal outlook to state lawmakers Tuesday during a speech in Athens.

Tax collections far outpaced what was needed to fund the state budget in fiscal 2016. The leftover money was put into reserves to help fund the state the next time there is a recession.

Deal said when he took office in 2011 there was a little more than $100 million in reserves, barely enough to run state government for a day. He announced in September that reserves were up to $2 billion and, barring another recession soon, they could hit $2.5 billion by the time he leaves office in 2019.