A lot of economic news has been bad the past few months, but you wouldn’t know it from looking at the state of Georgia’s bank account.

The state reported Friday that its tax collections were up 9.9% in September, continuing a roll that began in mid-2020.

Personal income tax collections were up 9.2% over the same month last year, while gross sales taxes improved almost 14.3%.

At least some of that is due to wage and price increases since September 2021, but Gov. Brian Kemp, who is running for reelection in November, is also pointing to Georgia’s economic growth on the campaign trail.

State Labor Commissioner Mark Butler said there are about 130,000 more people employed in Georgia now than at the same time last year, adding to the income tax growth.

The state gets the bulk of its revenue from taxes on income and sales. Corporate income tax collections, another source of revenue for the state, were up 51.6% in September.

Experts traditionally consider gains in those areas as a good sign for the economy. But Friday’s report comes amid predictions of a recession as the Federal Reserve, fearing that the economy still needs to slow down to beat back inflation, is expected to raise interest rates again.

Overall, the revenue the state took in was up $279 million over September 2021. But even that was lower than it would normally be because Kemp is continuing to suspend collections of the state’s gas tax to stem the impact of higher fuel prices. Prices have come down in recent months, but Kemp has each month suspended the tax.

That decision saved drivers, and cost the state, more than $170 million in September. Motor fuel money goes to road and bridge projects, and Kemp is replacing the taxes earmarked for that purpose with leftover surplus funds.

For the first quarter of the the fiscal year, collections are up 7.2%, or $513.8 million for a state that has run big surpluses the past two years.

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 COVID-19 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.

The news for September comes two months after the state reported it ended its fiscal year on June 30 about 23% — or $6.19 billion — ahead of last year. The surplus for fiscal 2022 — after all the bills were paid and agencies returned leftover funds — was about $6.6 billion, The Atlanta Journal-Constitution reported last month.

Kemp has already proposed refunding about $2 billion of it to taxpayers.

Stacey Abrams, the Democratic nominee facing Kemp in November’s race for governor, has said if elected, she will spend some of the fiscal 2022 surplus to give raises to teachers and law enforcement officers and pay for an expansion of Medicaid, the health program for the poor and disabled, to cover more people. She also would refund some of it to taxpayers.

State income tax collections have been on the rise since shortly after the beginning of the COVID-19 pandemic, when Congress first passed massive federal aid spending. Inflation has helped boost sales tax collections, with goods costing more and the taxes on them rising, and wages have also increased as unemployment hit record lows and businesses scrambled to fill job openings.

With the help of massive federal COVID-19 aid, the state ended fiscal 2021 with a $3.7 billion surplus. During the 2022 General Assembly session, lawmakers approved refunding about $1.1 billion of that to taxpayers. Much of the rest was put into state reserves.

Budget writers have noted that the higher prices for goods and services and the difficulty finding workers will drive up the cost of what the state has to spend as well, so whoever wins the governor’s race in November will likely propose spending increases in the coming year.

“Some of the issues that caused the surplus are really hurting Georgia families,” said state Senate Appropriations Chairman Blake Tillery, R-Vidalia. “They are also the things that are going to increase costs not only for Georgia families but for state government.”

Georgia tax collections

The state of Georgia’s tax collections for September, compared with September 2021:

Source: Georgia Department of Revenue

* Gov. Brian Kemp has suspended gas tax collections