State economist says Georgia revenues have flattened; cites capital-gains volatility and federal trade policy as top risks

Good afternoon. For those who do not know him, Bob Bushman, the state economist, told the House Appropriations Committee that Georgia's strong revenue gains in 2021'and 2022 have largely faded and that total tax revenues have "been essentially flat since 2022," despite short-term boosts from interest earnings on large reserve balances.

Bushman said the state's three largest tax sources'personal and corporate income taxes and sales taxes'grew by about $8.9 billion over five years but that 91% of the $9.3 billion cumulative growth occurred in fiscal 2021 and 2022. He told lawmakers that much of the earlier gain came from volatile capital-gains realizations: "Tax year 2021 was a great year for gains," producing an estimated $3.1 billion in state tax at the top statutory rate, he said, and that gains fell nearly in half in tax year 2022.

The presentation emphasized why withholding collections have held up despite rate cuts and why overall revenue appears stronger than some simple comparisons would suggest. Bushman said withholding benefited from continued real wage and salary growth, and that nonwithholding collections in recent years were driven…