With the huge infusion of federal money — whether supplemental unemployment benefits, direct payments or spending on health care and keeping businesses open — income was up last year for many Georgians.
“We have never had a recession before when people had more money to spend,” Dorfman said.
So Georgia has seen a sizable boost in sales tax collections, one of two main taxes that pay for state spending on education, health care and other areas.
Many who received the federal aid saved it, he said. Savings rates went from about 7% to 8% of income before the pandemic to 12% to 13% now. Credit scores have improved and credit card debt has declined, he said.
When Georgians are vaccinated, Dorfman said, “our economic recovery should be quite strong and swift because we will have the money to spend.”
The economist said he doesn’t expect widespread evictions or foreclosures if moratoriums are lifted and that business owners “in Georgia have done a tremendous job of finding ways to continue to carry on business during the pandemic.”
Kemp, who asked lawmakers last week to backfill more than $1.2 billion in school cuts made last year and borrow $1 billion for construction, also told budget writers Georgia’s economy is ready to grow.
“I am optimistic that the strong economic foundation we have built together will continue to support our robust recovery,” the governor said.
Long term, Dorfman said Georgia’s population growth has slowed from the boom years of the 1980s and 1990s, so labor force and job growth may not be as robust this decade.
Short term, getting Georgians vaccinated against COVID-19 is the key, and Department of Public Health Commissioner Kathleen Toomey said “it’s going to take many, many months” at the rate the state is currently receiving the vaccine from the federal government.
“We literally don’t know week to week what our allocation will be,” she said. “There’s some disconnect between what we were told was coming and what actually is available.”
She is hoping that situation will improve with the new administration taking over the White House on Wednesday.
COVID-19 vaccine shipments to Georgia are currently hovering around 80,000 per week, she said, far short of the millions of doses needed for the state to achieve herd immunity. The state hasn’t even come close to vaccinating half of nursing home and extended living facility patients, one of its first goals.
But President-elect Joe Biden has called for Americans to get 100 million COVID-19 vaccine shots during the first 100 days of his administration, which means by around May. That’s an ambitious goal considering the slow vaccination roll out so far.
State tax collections have been strong during the first half of fiscal 2021 — which began July 1 — generally a sign of an improving economy. Through December, collections are up $722 million, or 6.1%.
- Individual income tax collections are up 10%
- Gross sales tax collections are up 6%
- Corporate income tax collections are up 20.2%
- Tobacco tax collections are up 10.7%
- Alcoholic beverage tax collections are up 12.7%
- Car tag, title and fees are up 2.2%
- Hotel, motel fees are down 29.3%
Source: Georgia Department of Revenue