Figures from the Georgia Department of Revenue (DOR) show tax collections declined during September, but are there reasons for concern?
The net tax collections totaled nearly $3.3 billion in September 2023. Although that is an increase of just over $199 million, or 6.4 percent over September 2022, the increase is due in large part to the reinstatement Motor Fuel Excise Tax. When the motor fuel tax revenues are excluded, along with related local sales tax distribution adjustment, the September 2023 net tax collections dropped by just under $98 million, or 3.2 percent compared to a year ago.
The report reads: “On a year-to-date basis, total revenues were up 6.1 percent or $463 million from the same three months last year, driven mostly by collection of the state motor fuel tax that was suspended throughout the same time period in 2022. Net of the motor fuels tax changes and local sales tax distribution adjustments, revenues for the three months ended Sept. 30 were down 1.3 percent from this time a year ago.”
Despite the decline in revenues, at least one locally elected representative is not sounding any alarms.
Representative Barry Fleming (R-District 125) was one member of the local legislative delegation fielding questions at the Columbia County Chamber of Commerce’s Nov. 2 pre-legislative session breakfast.
Fleming said, although Gov. Brian Kemp (R) recently said FY2024 revenue estimate projections that revenue will decline by about 13 percent, Georgia remains on solid financial footing.
“The governor’s forecast, although I believe it’s correct, that the economy is slowing down, this tax revenue slowdown is not really going to affect businesses, particularly in Columbia County,” he said.
Fleming cited a number of reasons for his optimism.
“At the state level, Georgia has been managed so well fiscally, over the past couple of decades that we have a record surplus now at the state level, billions and billions of dollars, that we have set aside what we call commonly a “rainy day fund,” he said.
This means Georgia can weather a slow year or two, while still providing necessary services. That “rainy day” fund currently stands at nearly $11 billion, according to a report from the state accounting office, released in late October.
“The second thing is that when we slow down as an economy, we’ll see less business activity, but we’ll also continue to see a trend that businesses choose Georgia over other states,” Fleming explained. “So, although that may slow down, it will end immediately and that goes back to the other thing that usually keeps business away from states, and that’s lower taxes and lower regulations that hamper their operations.”
Fleming said he believes Florida and Texas are among Georgia’s biggest rivals to attract new businesses because those states do not have an income tax. Fleming said that’s one reason to support Georgia’s lowering of the state income tax.