Georgia Tax Revenues Increase as Lawmakers Struggle with Budget Cuts

The Georgia Department of Revenue has announced that tax collections rose 4.5 percent in January compared to the same month in 2019. Overall tax collections for the budget year, which began July 1, are now up $133 million.  The state is still short of the $800 million in new revenue that Gov. Brian Kemp and state lawmakers projected for this year when they passed the budget last spring.

According to budget experts, if Georgia’s revenues had grown this rapidly in every month as in January, the state would be on track for a surplus.  Instead Kemp ordered many agencies to make cuts in this year’s budget to save about $200 million.  He has proposed deeper cuts for the 2021 budget beginning July 1, seeking to reduce spending by about $300 million over what was originally planned this year.

Some lawmakers have expressed concerns about delays to a plan to open a transition center in Gwinnett County for teens being released from the Department of Juvenile Justice, saying that’s when youths are “vulnerable” and need the most support.  Rep. Scott Holcomb (D-Atlanta) asked whether cutting open positions would increase overtime spending and hurt morale among already low-paid juvenile corrections officers.  Lawmakers pored through cuts in vacant state trooper spending, with Public Safety Commissioner Mark McDonough saying attrition would likely reduce trooper ranks in 2021.  Following is the revenue report for January 2020.

The State of Georgia’s net tax collections for January totaled nearly $2.36 billion, for an increase of $100.8 million, or 4.5 percent, compared to January 2019, when net tax collections totaled $2.25 billion.  Year-to-date net tax collections totaled approximately $14.21 billion, for an increase of $133 million, or 0.9 percent, compared to the previous fiscal year, when net tax revenues totaled $14.07 billion.

Individual Income Tax collections increased by a total of $56 million, or 4.3 percent, compared to last year when Income Tax collections totaled $1.3 billion.  The following notable components within Individual Income Tax combine for the net increase:

• Individual Income Tax refunds issued (net of voided checks) were up $18.5 million, or 34.1 percent
• Individual Withholding payments for the month increased by $43.8 million, or 4.2 percent
• Individual Income Tax Return payments were up $12.3 million, or 91.7 percent, over FY 2019
• All other Individual Tax categories, including Estimated Tax payments, were up a combined $18.4 million

Gross Sales and Use Tax collections totaled $1.24 billion, an increase of $56.5 million, or 4.8 percent, over January 2019.  Net Sales and Use Tax increased by $27.7 million, or 4.6 percent, compared to last year, when net sales tax totaled $599 million.  The adjusted Sales Tax distribution to local governments totaled about $607.8 million, for an increase of $26.3 million, or 4.5 percent, over the previous year.  Sales Tax Refunds increased by nearly $2.5 million, or 43.2 percent, compared to FY 2019.

Corporate Income Tax collections totaled $50.1 million, which was an increase of $11 million, or 28.2 percent, over last year, when Corporate Tax collections totaled approximately $39.1 million.  The following notable components within Corporate Income Tax make up the net increase:

• Corporate Income Tax refunds issued (net of voids) were up $15.1 million, or 114.1 percent
• Corporate Income Tax Return payments for the month increased by $23.6 million, or 174.6 percent
• All other Corporate Tax types, including Corporate Estimated payments, were up a combined $2.5 million  

Motor Fuel Taxes:  Motor Fuel Tax collections increased by $9.2 million, or 6.3 percent, compared to FY 2019.  Motor Vehicle Tag & Title Fees increased by $6.5 million, or 19.1 percent, during the month, whereas Title Ad Valorem Tax (TAVT) collections declined by $13.4 million, or -20.1 percent, from last year’s total of $66.9 million.

Sources and for more information, visit http://www.legis.ga.gov, Associated Press, https://dor.georgia.gov/.

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