State revenue collections were off 3.1% in October, a continuation of a fiscal slowing that Georgia officials have seen throughout much of 2023 as the government comes down from its post-COVID-19 shutdown economic high.
The revenue news came only a few weeks after the state announced it ran a $5.3 billion surplus in the fiscal year that ended June 30 — the third consecutive massive annual surplus in a row. As The Atlanta Journal-Constitution reported, the state now has a record $16 billion in its rainy day and “undesignated” reserve funds.
However, in most recent months, adjusted state revenue collections have been below what they were in the same month of 2022. Take away the money the state raised from gas taxes remitted to the Department of Revenue in October — the state wasn’t collecting gas taxes during most of 2022 — and revenue was off 5.7% last month, the governor’s office reported.
Gov. Brian Kemp has again suspended gas tax collections, meaning the state will lose about $190 million a month, likely through the end of the year.
That’s good news for drivers, who are seeing lower fuel prices as a result.
For the first four months of fiscal 2024, state tax collections are up 4.2% over the same period a year ago, but again, that’s because the state had been collecting gas taxes for part of this year that it wasn’t 12 months earlier. Without that extra gas tax money, the state — overall — would be about $200 million behind last year.
That matters because the money the state collects in taxes helps pay for K-12 schools, colleges, public health care, prisons, policing, business regulation, roads and a host of other services.
The state revenue numbers are also seen as a sign of the strength of Georgia’s economy since the majority of the money comes from income and sales taxes. Individual income tax collections were off nearly12% in October and are down almost $300 million for the first four months of the fiscal year as compared with 2022. Gross sales tax collections are only up about 2%.
The governor warned state lawmakers earlier this year that the U.S. economy could be wobbly heading into the fall, and he cut some of the money they budgeted for this fiscal year.
But Kemp also told state agencies in August that they could request up to 3% worth of enhancements to their budgets in the coming year, a break from the past, when governors were reluctant to suggest spending boosts.
As the AJC reported last month, agencies took that message to heart, asking for big increases in spending on health care, education, public safety and raises for employees.
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