A Georgia State University study estimates the state could lose more than $1 billion in sales tax revenue this year due to fallout from the coronavirus pandemic.
State and local governments rely on sales tax dollars to fund everything from schools, health care and public safety. Facing such significant losses leaves a question mark on how governments will be able to fund these essential services.
The study looked at key industries immediately impacted by the pandemic due to social distancing mandates to slow the spread of the Covid-19 infections: airlines; restaurants; hospitality; and arts, entertainment and sports. Together, these industries account for 5.3% of the state’s gross domestic product and 6.1% of employee compensation, according to the study. In 2017, the latest year with enough data for the GSU report, Georgia’s GDP was $479 billion; 5.3% of that total is more than $25 billion.
The GSU study says the dramatic downturn in these industries due to Covid-19 are likely to reduce the state’s GDP by between 2.4% and 4.1% for the full year, totaling between $729 million and $1.29 billion.
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By: Dyana Bagby
April 22, 2020