Ga. revenue fell 6.6 percent in July

ATLANTA - New fiscal year, same old budget problems.

Georgia's revenue took another nosedive Monday as state fiscal managers reported that tax collections in July fell 6.6 percent from this time last year, giving the state a bleak start to its new fiscal year.

The troubling figures come amid mounting pressure on Gov. Sonny Perdue and state legislators to slash more spending or hike taxes to deal with a budget deficit that will likely top $1.6 billion.

State officials are already slashing department budgets and withholding tax cuts for homeowners. Perdue has ordered spending cuts of 6 percent and will defer state employee pay raises planned for January to deal with the growing shortfall.

Legislative leaders, meanwhile, say they are quietly discussing ways to shave more spending, but the latest revenue figures gave them little to cheer about.
Revenue in July, the start of the 2009 fiscal year, totaled $1.2 billion.

That's a drop of $86.4 million from the same month a year ago, and it was mostly fueled by falling income tax and sales tax collections.
Sales tax collections dropped by 5.3 percent, or $27.5 million. Personal income taxes slipped 6.5 percent, or $39.5 million, and corporate income taxes plunged at a greater rate 62 percent for the month.

July marks the third consecutive month where the state's revenue has plummeted.
Tax collections dropped 31 percent in May and another 9.4 percent in June, forcing Perdue to use $600 million of the state's $1.5 billion rainy day fund make ends meet.

Amid the dire economic news, one think tank is aggressively pushing for a drastic response.

The nonpartisan Georgia Budget and Policy Institute called again Monday for a special session, saying that eliminating new tax credits or hiking the cigarette tax is the only way to offset the budget shortfall.

On the Net:
Georgia Dept. of Revenue. http://www.etax.dor.ga.gov/