House Appropriations Chairman Terry England, R-Auburn, said the tight labor market has led to higher salaries, which in turn bring in more tax revenue.
“Folks that were making $8.25 an hour are now making $12 to $15 an hour,” England said. “That’s a lot of it.”
There are some caveats to the March numbers. Some big state income tax refunds made in late March won’t show up until next month. Monthly revenue figures are compared with the same month the previous year, but income taxes weren’t due in 2021 until the middle of May. This year they are due Monday.
In addition, the fuel tax suspension could cost the state about $400 million by the end of May, and Kemp has the power to continue it. That will eventually lower the fiscal 2022 tax take.
Still, the numbers and the state’s economy continue to look strong through the first nine months of fiscal 2022.
With the help of massive federal COVID-19 aid, the state ended fiscal 2021 with a $3.7 billion surplus. During the recently completed General Assembly session, lawmakers approved refunding about $1.1 billion or so of that to taxpayers. Much of the rest was put into state reserves.
The taxes the state collects help it educate 2 million children, provide health care to more than 2 million Georgians, manage and improve parks, investigate crimes and incarcerate criminals, and regulate insurance firms, utilities, and dozens of professions. The state issues driver’s licenses and helps pay for nursing home care for the elderly.
The state is a major provider of treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the pandemic. Besides paying salaries, it helps make sure that hundreds of thousands of former teachers, university staffers and state employees receive pensions and health care.
England said while state revenue numbers are strong, the cost of providing services are also rising with big pay raises this year for state employees and teachers and increased expenses for everything from gas and tires for patrol cars to construction and health care.
“The numbers look good and feel good, it’s going to look good and feel good for a while but you have to understand it’s going out (as expenses) on the back end,” he said.
State tax collections for the first nine months of fiscal 2022, which ends June 30:
Individual income tax
Corporate income tax
Motor fuels tax
All types of state revenue
Source: Georgia Department of Revenue