by T.A. DeFeo
Georgia officials reported net tax collections for April decreased by 16.5% over a year ago.
The Peach State’s April net tax collections approached $4.2 billion, a decrease of $829.5 million compared to April 2022, when net tax collections surpassed $5 billion. Despite the drop, year-to-date net tax collections of nearly $27.8 billion are up 0.9%, or $256.9 million, compared to last fiscal year.
This marks the second consecutive month in which Georgia officials reported decreased net tax collections. Last month, state officials said net tax collections for March decreased by 3% from a year ago.
“While state revenues were down sharply for the month, their strength earlier in the fiscal year means we are still slightly ahead of last year’s record-breaking pace,” Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, told The Center Square via email. “The state ran such a large surplus in fiscal 2022 that even a continued downward trend this year would leave the state in a strong financial position for this budget year.”
State officials noted that individual income tax collections were down by 32.4%, or more than $1 billion, from a year ago. However, they contend the decrease is due to a change in state law and point to a $1.3 billion increase year-to-date in corporate income tax collections.
“The governor has been sounding the alarm about economic forecasts and the need to be mindful of spending levels for quite some time,” Garrison Douglas, press secretary for Republican Georgia Gov. Brian Kemp, told The Center Square via email.
Jeffrey Dorfman, a University of Georgia professor and state fiscal economist, “made similar comments during budget hearings in January. Today’s numbers reinforce that message,” Douglas added. “It is important to note that the governor put forward a budget proposal and signed a budget last week that reflects those potential economic headwinds and ensures that Georgia is on solid footing to weather such an economic downturn.”
The latest National Federation of Independent Business Small Business Optimism Index also reveals economic concerns.
The index decreased by 1.1 points in April to 89, marking the 16th consecutive month below the survey’s 49-year history of 98. According to the index, nearly a quarter of businesses (24%) cited labor quality as the top business problem, followed by inflation (23%).
“Inflation is still pushing up prices all along the supply chain, and small businesses are still struggling to find enough qualified people to work,” NFIB State Director Hunter Loggins said in an announcement. “That’s making it difficult for Main Street businesses to hold prices in check and affecting their ability to deliver the goods and service their customers need.”
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T.A. DeFeo is a contributor to The Center Square.
