State tax collections were up 24.3% in December as Georgia’s economy remained strong through the holiday season.

For the first six months of fiscal 2022, collections are 18.1% ahead of last year, or $2.28 billion. The increase comes on top of a record fiscal 2021, when the state wound up with a $3.7 billion surplus.

Gov. Brian Kemp has proposed returning $1.6 billion of that to Georgians through income tax refunds.

Income tax collections were up almost 24% in December from December 2020, and sales tax collections were up 21.6%. Income and sales taxes make up the majority of state revenue.

The revenue numbers are good news for state lawmakers, who are beginning to review Kemp’s proposal to increase state spending by $3 billion this year. Kemp’s plan includes pay raises and bonuses for teachers and state and university employees, plus big increases in funding for education and health care.

It is also good news for Kemp, who is up for reelection this year and faces both Republican and Democratic opposition. The state’s fiscal economist, Jeffrey Dorfman, told lawmakers Tuesday that he expects a slowing of revenue growth in 2022.

The numbers have been boosted since mid-2020 by federal aid to Georgians that was approved after the start of the COVID-19 pandemic. That aid for many Georgians continued through 2021.

Dorfman, a University of Georgia economist, told lawmakers that personal income is up 8% from before the COVID-19 pandemic. With massive federal spending, he said, Georgians have saved an extra $75 billion since the start of the pandemic.

Now that most Georgians are no longer receiving direct federal payments, the state will see less revenue because that extra money boosted sales tax collections. That could mean slower growth in the coming year, he said.

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