October 21, 2024
ATLANTA (AP) — Tax collections continue to roll into Georgia's state coffers, supporting Gov. Brian Kemp's plan for a big boost in spending and a possible tax cut.
Figures released Friday show Georgia's general fund collected $17.8 billion through Jan. 31. That's $2.7 billion, or 18%, ahead of last year's pace. Through the first seven months of the 2022 budget year, the state is on pace to collect $30.5 billion, more than $3 billion above the $27.3 billion that lawmakers designated for spending.
Individual income taxes are running 16% ahead of last year through seven months, while corporate income taxes are running 32% ahead. Sales taxes are running 18% ahead. The state economist warned last month that big year-over-year increases are likely to abate in coming months, as revenue begins to be compared to months in which the state economy was more robust than in the early part of the COVID-19 pandemic.
Kemp has proposed boosting spending for the current budget year, which ends June 30, by more than $4 billion. That includes using $1.6 billion from last year's surplus to give state income tax rebates — $250 to every single person filing state income taxes, $375 to every single person heading a household and $500 to married people filing jointly. Kemp also wants to make one-time payments of $2,000 to teachers, $5,000 to state employees and $1,000 to other K-12 workers including school bus drivers, part-time employees and cafeteria workers. Finally, Kemp wants to restore full funding to the state's K-12 and university funding formulas.
The governor proposes converting those one-time payments to annual raises and continuing the funding restorations in the budget year beginning July 1, when he wants to spend more than $30 billion in state revenue.
Republicans are also eyeing plans to cut state taxes. Republican state senators contending for higher office have proposed eliminating Georgia's income tax entirely. Republican House Speaker David Ralston of Blue Ridge has rejected that plan, but has said he wants to make a more incremental tax cut. Kemp has said he wants to work with Ralston on a tax cut.
The state finished the 2021 budget year with a $2.35 billion surplus even after the state’s rainy day fund was filled to the legal limit of $4.3 billion.
Georgia’s budget pays to educate 1.7 million K-12 students and 435,000 college students, house 45,000 state prisoners, pave 18,000 miles (29,000 kilometers) of highways and care for more than 200,000 people who are mentally ill, developmentally disabled or addicted to drugs or alcohol.
