Georgia tax collections were down for the third consecutive month in January, but Gov. Brian Kemp’s administration said it is confident they will pick back up and the state will still be able to raise enough money to fund this year’s $27 billion budget.
The state’s fiscal year ends June 30, and the Georgia House on Friday passed the state’s midyear budget, which adds money for things such as increased enrollment in the state’s schools and public health care program.
Kemp has proposed an even bigger spending plan for next year, including $3,000 pay raises for teachers and a 2 percent hike for state employees.
Collections in January were off 12.2 percent from January 2018. Most of the decline was in individual and corporate income tax collections.
The slow numbers in January come after drops in November and December of 0.7 percent and 4.5 percent, respectively.
For the fiscal year, collections are up slightly at 1.5 percent. They will need to pick up in the final five months of the fiscal year for the state to be on target to meet its spending plan.
December and January were off in large part because they were compared with big-collection months in December 2017 and January 2018. Those months were huge for the state because many taxpayers prepaid their state income taxes, thinking it would help them when the then-new federal tax law kicked in.
State officials across the country saw huge increases in collections at the time from people hoping to take advantage one last time of a federal deduction on state taxes that was scaled back by the federal changes that Congress enacted in December 2017. The Internal Revenue Service, however, decided those prepayments could be deducted only in limited circumstances.
Stay on top of what’s happening in Georgia government and politics at ajc.com/news/georgia-government/.
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