INCREASE IN TAX REFUNDS HURTS GA. REVENUE

February income tax take drops 5.6%; sales taxes up 10.1%.

State tax collections were off in February, but it’s not necessarily a bad sign for the economy or because of a sudden tax cut.

It’s largely due to the state Department of Revenue increasing the amount of income tax money refunded to Georgians.

Overall, the state’s tax take was off 5.6 percent, or almost $70 million, in February, Gov. Nathan Deal’s office reported Tuesday.

Last year, refunds were delayed when a security breach at the Internal Revenue Service forced Georgia officials to take additional precautions. The state Department of Revenue has implemented a new fraud management system.

Net sales tax collections were up 10.1 percent in February, one of the stronger months in fiscal 2017, which ends June 30. For the fiscal year, total collections are up 3.6 percent, or about $500 million.

Sales and income taxes provide a majority of the money the state collects to fund various programs.

The state budget helps fund the education of more than 2 million students and provides health and nursing care for about 2 million Georgians. The state funds road improvements and prisons, economic development initiatives and cancer research, business and environmental regulation, parks and water projects. It creates thousands of private-sector jobs through construction projects. The state House has already approved a $25 billion budget for the upcoming fiscal year, and the Senate is expected to follow with its version soon. Lawmakers must pass a budget for fiscal 2018 before the General Assembly session ends March 30.

One caution flag in the tax numbers for the state is an ongoing decline in corporate income tax collections. February marked the third consecutive down month, and corporate income tax collections are off 14.5 percent for the first eight months of the fiscal year. That slowdown is part of a national trend, said Deal’s budget director, Teresa MacCartney, but corporate income taxes make up a relatively small percentage of total state revenue.