State of Georgia revenue continues to soar after two years of surpluses

That suspension costs the state — and saves drivers — $150 million to $170 million a month.

At least some of the revenue hike is due to wage and price increases since October 2021. Nonetheless, Kemp has made his handling of the economy one of the main themes of his reelection campaign against Democrat Stacey Abrams, blaming President Joe Biden’s administration for any economic headwinds nationally while pointing to Georgia’s success in attracting new car plants and running budget surpluses.

The state gets the bulk of its revenue from taxes on income and sales. Corporate income tax collections, another source of revenue for the state, were up 12% in October.

Experts traditionally consider gains in those areas as a good sign for the economy. Monday’s report comes amid concerns that the economy will slow because of interest rate hikes designed to slow inflation.

The taxes the state collects help it educate 2 million children, provide health care to more than 2 million Georgians, manage and improve parks, investigate crimes and incarcerate criminals, and regulate insurance firms, utilities and dozens of professions. The state issues driver’s licenses and helps pay for nursing home care for the elderly.

The state is a major provider of treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the COVID-19 pandemic. Besides paying salaries, it helps make sure that hundreds of thousands of former teachers, university staffers and state employees receive pensions and health care.

The news for October comes three months after the state reported it ended its fiscal year on June 30 about 23% — or $6.19 billion — ahead of last year. The surplus for fiscal 2022 — after all the bills were paid and agencies returned leftover funds — was about $6.6 billion, The Atlanta Journal-Constitution reported in September.

Kemp — who faces voters in Tuesday’s election — has proposed refunding about $2 billion of the surplus to taxpayers.

Abrams has said if elected, she will spend some of the fiscal 2022 surplus to give raises to teachers and law enforcement officers, and pay for an expansion of Medicaid, the health program for the poor and disabled, to cover more people. She also would refund $1.1 million of it to taxpayers.

State income tax collections have been on the rise since shortly after the beginning of the COVID-19 pandemic, when Congress first passed massive federal aid spending. Inflation has helped boost sales tax collections, with goods costing more and the taxes on them rising, and wages have also increased as unemployment hit record lows and businesses scrambled to fill job openings.

With the help of massive federal COVID-19 aid, the state ended fiscal 2021 with a $3.7 billion surplus. During the 2022 General Assembly session, lawmakers approved refunding about $1.1 billion of that to taxpayers. Much of the rest was put into state reserves.

Budget writers have noted that the higher prices for goods and services and the difficulty finding workers will drive up the cost of what the state has to spend as well, so whoever wins the governor’s race will likely propose spending increases in the coming year.

The state of Georgia’s tax collections for October, compared with October 2021:

Source: Georgia Department of Revenue

* Gov. Brian Kemp has suspended gas tax collections