State tax revenues decline for third straight month

Capitol Beat News Service

Georgia tax collections fell in June for the third month in a row but not as precipitously as the previous two months, the state Department of Revenue reported late Friday.

State tax revenues declined by 8.8% last month compared to June of last year. That marked a slight improvement over the 10.1% drop-off reported in May and a huge jump over the nearly 36% plunge in April at the height of the statewide economic lockdown brought on by the coronavirus pandemic.

Individual income tax collections were off only slightly in June, by 0.6% compared to the same month a year ago. Net sales taxes fell by 1.9% during the month.

Typically volatile corporate income tax receipts, however, fell sharply in June by 56.5%.

With the tax payment deadline delayed until July 15 this year because of COVID-19, corporate tax payments last month were down 53.9% from June of last year. On the other hand, corporate tax refunds rose by a steep 40.9%.

Falling tax revenues since spring resulting from the coronavirus-driven recession were the key factor driving $2.2 billion in state spending cuts the General Assembly imposed in the fiscal 2021 budget lawmakers adopted late last month.

Revenues didn’t drop quite as much as had been anticipated, allowing the legislature to avoid furloughing teachers and state employees. However, there wasn’t enough money to fund either the pay raises Gov. Brian Kemp had proposed in his original budget recommendations or to consider a second installment on a state income tax rate cut the General Assembly passed two years ago.