Experts find positive signs in revenue report

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Posted 8:39AM on Saturday, December 6, 2003

ATLANTA - State tax collections are still running below the rate needed to meet spending levels for the current budget, but government officials and others said Friday they see some positive signs in the latest figures. "It's the first time in two and a half years that we have had four straight months of positive revenue growth. I do think we've turned the corner rather decisively," said University of Georgia economist Jeffrey Humphreys. "We're not out of the woods yet but at least were moving into a pattern of steady, solid growth," he added. Senate Appropriations Chairman Jack Hill, R-Reidsville, said the state still faces short-term big money challenges but in the long term things are very, very encouraging. They commented after the state Revenue Department reported that tax collections for November were up 3.3 percent, or $34 million, compared to the same month last year. For the budget year which began July 1, collections were up 4.4 percent, or $220 million, the report showed. "The positive thing is, you've got growth. The concern is, the growth is a little bit slower than we had hoped," said Tommy Hills, the state's chief financial officer. To balance the $16.1 billion budget, tax collections must grow in the range of 7.5 percent to 8 percent during the last half of the budget year, Hills said. "That's the growth rate needed even after factoring in $500 million the state received this year in one-time federal grants, and accounting for the 2.5 percent spending curbs the governor has proposed." Hill, the Senate budget chairman, said the most encouraging statistic was that individual income tax collections were up 8.6 percent in November. "When you look inside the numbers, that has been our weakest area over the last couple of years," he said. Revenue Commissioner Bart Graham said the figure demonstrates that people are either making more or more people are back at work. The cigarette tax, increased this year to help balance the budget and avert deeper spending cuts, was underperforming in November. Expected to raise an additional $180 million, the trend now suggests it will miss that goal by about $40 million, state officials said. Total collections for the month were $1.1 billion, bringing collections for the first five months of the fiscal year to $5.2 billion.