State tax collections were off 5.4% in April, continuing a trend that likely means revenue will be down for the fiscal year when it ends June 30.
For the first 10 months of fiscal 2024, collections are down 1.2%, or $341 million, from the same period in 2023.
Most of the state’s revenue to help pay for K-12 schools, colleges, public health care, prisons, policing, roads and other services comes from income and sales tax collections. Both were down in April.
One month isn’t a barometer, but collections have been flat or down for much of the past year.
However, Gov. Brian Kemp budgeted for slow revenue over the next 18 months. The nearly $38 billion midyear budget Kemp signed in February — a record amount of spending for the state — accounted for the decline, as did the budget for the coming year that he signed this week. In fact, the state may still wind up the fiscal year with a surplus.
In Georgia, governors set the limit for what the General Assembly can appropriate, and traditionally their official estimates are on the low side to hold down spending.
In April, the month income taxes are due, individual income tax collections were off 8%. Net sales tax collections were down 3%.
Collections were also stagnant for most of 2023 after three years of skyrocketing growth fed a growing state budget.
Stagnant or falling tax collections and higher spending normally wouldn’t go together in a state that is mandated to have a balanced budget.
But the state started 2024 with $16 billion in “rainy day” and undesignated reserves due to the money taken in during recovery from the post-COVID-19 economic shutdown and conservative budgeting. Kemp and lawmakers used $2 billion of those reserves this year to fund the record midyear budget.
