State tax collections continued to be strong in January despite a spike in COVID-19 cases and expectations of more income tax refunds going out to Georgians.
The 7.5% improvement in January collections over the same month in 2020 continued a trend that started around the time Georgia lawmakers cut 10% in spending because of fears the pandemic recession would hammer state finances.
Instead, the Georgia Senate on Tuesday followed the House’s lead in passing a midyear budget that restores 60% of what was cut from k-12 school funding and spends tens of millions of dollars more on public health care programs aimed at helping the fight against COVID-19.
“We are certainly in a lot better situation than we were in last year,” said Senate Appropriations Chairman Blake Tillery, R-Vidalia.
According to Gov. Brian Kemp’s office, individual income tax collections were up 6.3% in January, sales tax collections rose 8.8% and corporate income taxes climbed 51.2%. The state gets most of its revenue to fund schools, roads, health care and other programs from income and sales taxes.
The income tax numbers were inflated by lower refunds in January compared with January 2020. Budget writers expect much bigger refunds in coming months as the hundreds of thousands of Georgians who received unemployment benefits in 2020 after losing their jobs begin filing their tax returns.
Overall, through the first seven months of fiscal 2021, state collections are up 6.3%, or just under $900 million.
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