ATLANTA – Georgia tax collections fell slightly last month compared to June of last year, but the state closed out fiscal 2023 with a huge surplus for the third year in a row.
The Georgia Department of Revenue brought in $2.84 billion in taxes in June, down 0.4% from the same month a year ago. However, the $33.13 billion in receipts into the state’s coffers for the full 12 months of the last fiscal year far exceeded the $28.4 billion revenue estimate Gov. Brian Kemp made in January, generating a surplus of nearly $4.8 billion.
Individual income taxes last month were down 12.6% compared to June of last year, largely due to a 53.6% increase in refunds issued to Georgia taxpayers.
Net sales tax collections went the other way, increasing by 4%, not enough to offset the decrease in income taxes.
Corporate income tax receipts declined by 14.7%, as refunds issued to Georgia businesses soared by 458.6%.
Still, the year-end budget surplus is sure to touch off a debate over what to do with the money. Kemp pledged to take a conservative approach.
“The governor looks forward to working closely with the General Assembly on priorities for how the state’s one-time funds will be utilized in a strategic, fiscally responsible way that does not commit short-term revenue gains to long-term obligations,” Kemp’s office wrote Wednesday in a statement emailed to Capitol Beat.
Kemp has used budget surpluses the last two years to fund state income tax cuts that were enthusiastically supported by legislative Republicans.
But opponents have argued that most of those cuts have gone to benefit upper-income Georgians, while the state continues to inadequately fund government services for those who are less well off.
“State leaders have an obligation to respond to long-standing deficits across public education, access to health care and economic mobility, yet they are actively choosing to leave billions on the table to accrue increasingly large reserves for no clear purpose,” said Danny Kanso, senior fiscal analyst for the Georgia Budget and Policy Institute.
Georgia voters reelected Kemp to a second term last November after the governor pledged on the campaign trail to back a $1 billion state income tax rebate and pay raises for teachers and state employees. The General Assembly’s Republican majority approved both measures during this year’s legislative session.