After months of record tax collections, July was a slow month for state number crunchers.
Tax collections were only up 0.4% in July over July 2020 — $8.7 million — the smallest increase in a long time in Georgia.
But that doesn’t necessarily signal a change in the economy. The state compares each month’s collections to the same month the year before. And collections skyrocketed in July 2020 as the state’s economy started gathering steam following the COVID-19 pandemic lockdown in April.
In fact, after a record fiscal 2021 — which ended June 30 — gains will likely be depressed in coming months because it will be hard to top the roaring growth the state saw last fall and this spring.
For July, the state’s two major revenue sources — income and sales taxes — saw mixed results. Income tax collections were down 9.1% because there was more in refunds paid out and less tax money withheld from paychecks.
Part of that could be due to a reduction in federal aid to the unemployed. Early in the pandemic, the federal government was tacking $600 a week onto unemployment checks to help the millions of Americans thrown out of jobs during the April 2020 shutdown of the economy. The state withheld income taxes from those extra benefits, which expired about this time last year.
Meanwhile, net sales tax collections were up 17.2% last month over July 2020, indicating Georgians are spending money. Motor fuel tax collections were up 6.4% as traffic increased, and hotel fees were up 61% as far more people stayed in hotels compared with the same period last year.
Still, the gains seem puny when compared with fiscal 2021. State revenue increased $3.2 billion — about 13.5% — in the recently completed fiscal year, leaving officials with a hefty surplus.
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.
GEORGIA REVENUE IN JULY vs JULY 2020
Georgia’s revenue was up by 0.4 %
Here’s a breakdown of tax collections for July 2021 vs July 2020:
Income tax — -9.1%
Sales tax — +17.2%
Hotel/motel tax — +60.7%
Motor fuel tax — +6.4%
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