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Georgia tax collections down 14 percent

POSTED: February 7, 2009 12:29 a.m.

Gov. Sonny Perdue announced Friday that the state’s net revenue collections for January declined 14.3 percent, a decrease of $262 million, compared to last year.

Last month, the state took in $1.57 billion; it collected $1.84 billion in January 2008.

State Sen. Lee Hawkins, R- Gainesville, said the numbers were lower than expected.

"The numbers are getting worse," Hawkins said. "January was the worst month we have seen in terms of decline of revenue."

Hawkins said lawmakers will need more time to adjust the budget.

"The income in is bad shape, and we’ve got people crunching numbers in the budget office," he said. "We’re trying to do the best job we can to make sure we’ve got everything in there that we can."

The drop in January collections had been rumored around the Capitol for days. The news comes as lawmakers are grappling with a $2.2 billion deficit in the current year’s budget.

In the announcement issued from his office, Perdue had no comment on the revenue slide. Several lawmakers predict that the governor will announce a reduction in the state’s revenue estimate. In Georgia, the governor sets the estimate, which is the maximum amount that lawmakers can spend in the state budget.

Lt. Gov Casey Cagle, R-Chestnut Mountain, said he was hopeful that Perdue would not lower the revenue estimate.

"There is no question that we’re very concerned about the revenue numbers," Cagle said. "Right now, we have to deal in reality, and the reality is that revenue continues to fall. We will have to make very difficult cuts."

He predicted the cuts will include additional furloughs for state workers.

"There is an attitude in the Capitol that is very discouraging," Cagle said, "and that is that the stimulus plan in Washington is going to bail us out. The reality is that we have to make the tough choices in downsizing state government, cutting state spending and fulfilling the commitment that we made to homeowners across the state."

Cagle said the federal stimulus plan may come with too many strings and may be of little help to the state.

Some of the money would flow to road projects and school districts, for instance, which could not be used to put furloughed state employees back to work. It also would not pay for the $428 million in homeowner tax relief grants state legislative leaders have pledged to fund this year.

Georgia legislators plan to adjourn in late March with the option of returning in June, handing them some flexibility in dealing with a federal stimulus package as well as any continued state economic slump.

The numbers reported in January cover the month of December and show that spending in Georgia during the holiday season was dismal. Sales tax revenues were off 17 percent from the same month last year.

And that wasn’t the only category to see a slide. Individual income taxes dropped by 13.3 percent and corporate income taxes took a 117 percent nosedive.

"There are really no bright spots in there," state fiscal economist Kenneth Heaghney said. "It’s uniformly negative."

The Associated Press contributed to this report.


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