(The Center Square) — Georgia’s February net tax collections decreased by 4.3% or $92.3 million from a year ago, but year-to-date collections remain above last year thanks to the state reinstating the gas tax.
According to a news release, monthly collections totaled more than $2 billion, and year-to-date net tax revenue surpassed $21.1 billion, a 1.1% or $223.4 million increase from fiscal 2023.
State officials said the increase was mainly due to the collection of the state’s motor fuel excise tax, suspended for months last year. Aside from the motor fuel tax changes, revenues for the eight months ending February 29 were down 3.1% from last year.
“Through eight months of FY 2024, Georgia’s tax revenue collections remain on pace to exceed estimates and to give state leaders confidence in the state’s ability to finance the costs of the recently enacted AFY 2024 budget,” Georgia Budget and Policy Institute Senior Fiscal Analyst Danny Kanso said in a statement to The Center Square. “Going forward, our leaders can make greater use of the unprecedented undesignated reserves that are likely to remain unspent and available to be deployed for priorities strongly supported by most Georgians, such as replacing aging school buses and improving access to affordable child care statewide.”
However, Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, said the numbers should give lawmakers the confidence to proceed with tax cuts.
“After years of record surpluses, it is encouraging to see Georgia’s revenues remain basically flat so far this year,” Wingfield said in a statement to The Center Square. “Yes, we have to account for the fact that the motor fuel tax was suspended for much of the previous fiscal year — but then again, general revenues had to backfill that suspended tax to pay for the state’s transportation budget.
“So, in a very real sense, things essentially remain even with last year, when Georgia ran another large surplus,” Wingfield added. “It’s particularly encouraging when you consider that the personal income tax rate fell at the start of this calendar year, which was halfway through the fiscal year. We believe these numbers should give lawmakers the confidence to press ahead with — and even accelerate — the tax cuts planned for the next several years.”
Additionally, a leading independent business group said business optimism continues to decline, with companies saying inflation remains the top challenge.
“The bottom line is that a dollar doesn’t buy as much as it did just a few years ago,” National Federation of Independent Business State Director Hunter Loggins said in a statement. “When you’re paying more for raw materials, transportation, and wages, it’s hard to invest in new equipment, open a second location, or hire additional workers.
“That’s why we’re asking the General Assembly to ease the financial burden on small businesses by passing House Bill 808, a bill raising the threshold for paying Georgia’s tangible personal property tax.”
