State tax collections down $1 billion in April as deep budget cuts loom

    The state's monthly revenue report showing a 35.9% drop in total revenues from last April was released Wednesday on the eve of renewed budget talks, with state lawmakers set to meet virtually Thursday. Lawmakers plan to return to the Gold Dome later this month for in-person budget negotiations. Xavier Arnau/Getty Images

    It’s another stunning sign of the economic impact COVID-19 has had on Georgia: State revenues saw a $1 billion drop last month.

    The monthly revenue report showing a 35.9% drop in total revenues from last April was released Wednesday on the eve of renewed budget talks, with state lawmakers set to meet virtually Thursday.

    The drop-off in state revenues is no surprise, and it is likely just the beginning of the grim months that lie ahead as the effects of the pandemic are felt in Georgia.

    Legislators have already been told to plan to cut next year’s budget by 14% after struggling to find ways to trim 4% and 6% from this year’s and next year’s budgets, respectively.

    “While the Great Recession of 2008 was considered then to be a ‘once in a lifetime’ event, our current situation will certainly overshadow it,” the state’s budget writers wrote in a memo to state agency heads this month. “That is why this request is being made to ALL areas of the state budget with no exceptions.”

    This means budget cuts are coming to K-12 schools, which were largely spared from spending reductions earlier this year.

    Lawmakers abruptly adjourned their session on March 13 with next year’s budget negotiations unfinished.

    A dramatic drop in individual income tax revenues – which are down about 46% – can be partly explained by the usual April filing deadlines delayed due to the outbreak. That represented a $732 million dip. Taxpayers now have till July 15 to file state and federal tax returns.

    The sales tax collections, though, reflect COVID-19’s chilling effect on commerce in the state. The report captures transactions that took place in March, when the novel coronavirus drastically upended daily life about midway into the month. Those revenues were down 14.3%, or $82.4 million.

    Hotel fees were also down 50%, a loss of about $8.5 million. The hospitality and travel industries have been particularly hard hit by COVID-19’s economic effects.

    Curiously, last month’s alcohol tax collections were up 13%, or $2.1 million. Tobacco tax revenue was also up 37.5%, or $6.5 million

    The April revenue report is yet another reminder of how abruptly the novel coronavirus has changed the economy. Just a month ago, the same report showed a 9.8% increase in state revenues. At the time, it was expected to be the last sign of the good times.

    Georgia has also seen record unemployment claims filed, with about 1 million Georgians suddenly out of work. Back in December, state officials were touting a record low in the state’s unemployment rate.

    Jill Nolin
    Jill Nolin has spent nearly 15 years reporting on state and local government in four states, focusing on policy and political stories and tracking public spending. She has spent the last five years chasing stories in the halls of Georgia’s Gold Dome, earning recognition for her work showing the impact of rising opioid addiction on the state’s rural communities. She is a graduate of Troy University.