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Georgia Hanging On – For Now
Despite another slipping of the state’s tax haul, officials say emergency, deeper budget cuts aren’t needed – yet
by Walter C. Jones, Morris News Service
November 10, 2009
Tax collections for the state fell
again in October compared to the same month in the previous fiscal year, according to recent
figures released by Gov. Sonny Perdue's office. Collections were off 18 percent, or 15 percent for
the first four months of the fiscal year.
One think tank called for tax increases to prevent further cuts, but Perdue's staff says
emergency action isn't needed. Perdue's spokesman Bert Brantley notes that the governor has already
cut $900 million from the budget he signed into law in April, so deeper cuts are not necessarily
eminent. The numbers look bad in comparison, he says, because the steep drop in collections caused
by the recession hadn't hit the taxman last October.
Last October was
essentially even with October 2007. Last November registered growth of 1.4 percent over the prior
year.
The recent figures for October 2009 showed total collections are $831 million behind this
point of last year. "Those numbers are startling, certainly. But it's important to remember that
we're comparing against months before the real teeth of the recession hit," Brantley says.
Among the latest round of cuts was a three-day furlough and withholding 5 percent of the
funds appropriated to all state agencies, except for 3 percent for education and healthcare. There
were no cuts for the reorganized mental-health agencies either. "This is already a cut budget. The
slices and dices to these agencies had already happened in the 2010 budget," Brantley says. "So
these cuts were on top of the cuts that the legislature had already done."
Independent think tank, the Georgia Budget and Policy Institute, says quick action is
required and recommended that taxes be raised to stave off further cuts. "Georgia cannot cut its
way to prosperity," the institute wrote in a statement released moments after the tax-collection
figures were made public. "The governor and General Assembly must look to raise revenues, as a
majority of states have done, including a majority of our conservative southern neighbors."
Legislative leaders have consistently rejected any suggestion of higher taxes. They argue
taking money from private individuals would stifle job creation.
Senate Appropriations Committee Chairman Jack Hill, R-Reidsboro, says any additional cuts
required to balance the current year's budget may not need to be drastic. The budget Perdue
proposes in January for the next fiscal year could be more difficult.
Still, he sees some signs of economic improvement, such as the production at the new Kia
Motors plant in West Point and the strength of activity at the ports of Savannah and Brunswick.
Says Hill, "We're not a state that's headed in the wrong direction," he says. "We're trudging our
way through this."
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