In May 2024, Georgia experienced a 1.1% decline in tax revenues compared to the same month the previous year, marking a continued downward trend. For the fiscal year to date, this results in a 1.2% overall decrease. These figures do not fully reflect the impact of the state’s exemptions on gasoline and motor fuel sales taxes, which were in effect during the first half of the previous fiscal year.
Fiscal Year Trends and May Highlights
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According to the state Department of Revenue, Georgia’s tax collections faced significant challenges in May, as reported by Rough Draft. This decline highlights ongoing financial pressures, with only one month left in the fiscal year. Over the first 11 months of fiscal 2024, Georgia’s tax revenues have decreased by 1.2% compared to the same period in fiscal 2023. When accounting for the exemptions on gasoline and motor fuels, the net decrease in Georgia’s tax revenues over the 11 months ending May 31 is 4.3%.
Income and Corporate Tax Variations
Individual income tax receipts notably fell by 3.3% year-over-year in May, primarily due to a substantial 32.9% decrease in individual Georgia tax payments. In contrast, net sales tax collections saw a modest increase of 0.4% compared to May of the previous year. Corporate income taxes faced a sharp 35.1% decline in May, driven by a 23.1% drop in Georgia tax payments and a significant 497.5% increase in refunds issued by the revenue agency.
Governor’s Response and Future Outlook
As the fiscal year draws to a close on June 30, Governor Brian Kemp has cautioned about tighter financial conditions ahead. Despite these challenges, Georgia has accumulated a $16 billion budget surplus over the past three years, which is expected to mitigate the need for major spending cuts. This surplus aims to stabilize Georgia’s financial outlook amid ongoing economic uncertainties and fluctuating tax revenues.
Georgia’s ability to maintain a significant budget surplus provides a crucial buffer, helping to manage financial pressures as the state navigates economic challenges.
