Final 2009 numbers show state revenue off $1.9 billion

Tax revenue collections were off a total of more than $1.9 billion in the 2009 fiscal year that ended June 30, Gov. Sonny Perdue’s office announced Friday.

Collections of state personal income, corporate income and sales taxes were off 11.1 percent for 2009, compared to 2008. In June alone, tax collections fell 17.8 percent from the same 30 days in 2008.

For the year as a whole, corporate income tax collections fell most dramatically, as the state took in 26.3 percent less from businesses in 2009 than in 2008. Personal income taxes fell by 12.2 percent while sales taxes were off 8.8 percent.

“It means it’s pretty much status quo, and that’s not a good thing,” said Alan Essig, executive director of the Georgia Budget and Policy Institute, a private think tank. “With reserve funds and some savings the governor has prepared, we’ll pay our bills.”

Indeed, when the final books are closed on fiscal year 2009 in the next few weeks, Perdue will likely have to transfer around $350 million from the state’s rainy day fund to cover the budget shortfall, his press secretary Chris Schrimpf said Friday.

When fiscal 2009 began, the state was sitting on $1.02 billion in that reserve account. But about $200 million was spent already this year. By the time 2009’s books are closed, the state will have around $460 million in reserve. Of that, however, $259 million has been budgeted to spent in 2010, leaving just $200 million from the rest of the year.

This month’s news was not unexpected, as state revenue collections have fallen for seven consecutive months now. But Perdue has been hopeful 2010 will be different.

The governor and state lawmakers wrote a 2010 state budget assuming little to no revenue growth over 2009 as prospects for the state’s economy remain bleak. Still, the governor has already asked — not demanded, but suggested — state agencies set aside 3 percent of their July monthly budget to prepare for further cuts.

“We’re trying to take precautions,” Schrimpf said.

The day next month when July’s revenue figures come in will be an important moment for the state, he said. If revenue figures in the first month of the new fiscal year are down again, the governor and lawmakers could be forced to enact even deeper cuts to state agencies.

“Next month will probably be more meaningful,” Schrimpf said. “The governor is meeting with leadership next week and it will be an important discussion.”

Answers are not going to be easy, Essig said.

“Two hundred million in rainy day funds doesn’t leave you much leeway,” he said.

He expects the first half of fiscal 2010 to continue to be difficult, as the state economy didn’t really begin to tank until about January. That means July’s through December’s revenue figures could continue to be in the red.

“In the second half of the year you can expect us to start catching up,” Essig predicted.

13 comments Add your comment

NRB

July 10th, 2009
6:37 pm

Heaven forbid these crooks SPEND LESS.

GaNative

July 10th, 2009
6:38 pm

Is this really news worthy? How can they expect revenues to be up when most of the people they were taxing to death are not working?

Maretta

July 10th, 2009
11:58 pm

It seems that state government is all messed up. Can anyone up there do anything right! They don’t have our best interests at heart; so, they should do like Sarah Palin — resign.

Eddy

July 11th, 2009
6:58 am

” When you do what you’ve always done, you get what you’ve always gotten.” Is there any effort being made in state govt to require each state agency and each department within each agency to determine what is absolutely essential and then budget accordingly? Budgeting is not something the govt is good at or wants to be good at. They start with the premise of the status quo and then go from there. When the govt cuts the budget and then dole out the cuts across the state agencies, are the cuts equal across all agencies? If the agencies haven’t done the detailed work of identifying the absolute essentials within each agency, the broad brush cuts will achieve the goal of cutting the budget but the cuts probably take away some absolute essential functions along with the nice to haves as well as the ridiculous. Budgeting is not something the govt is good at….just look at the bloated bureaucracy .

Bruce

July 11th, 2009
9:38 am

Say what you may but at least the Governor is not asking for tax increases during a recession like North Carolina’s Governor Bev Perdue is doing. GA’s Governor Perdue is smart enough to know you just can’t tax your way out of a recession.

TurdFerguson's Turd

July 11th, 2009
10:49 am

Good news here, let the state not only do with less, but do without. Raise taxes? Sure go ahead. I don’t pay ‘em anyway. I say all state employees from perdue on down take a 50% pay cut. Get rid of all expense accounts & cut spending in every department & authority by 50% immediately. Then, start firing people.
Good for a start.

GA FairTax

July 11th, 2009
9:01 pm

“Consumption is a LESS volatile and MORE reliable tax base than income and these statistics are one more indication… The revenue shortfall would have been less than the 8.8% shown above had the state been on a FairTax like system… That is a powerful argument, it seems to me.”

Neil

July 12th, 2009
10:56 am

Looks like this is a great example of why we should go to the fair tax.

Get the Government Off My Back!

July 13th, 2009
7:36 am

Ferguson, I’m a State employee. Why should I have to take a 50% pay cut? I work my tail off during the week and I don’t use travel and expense accounts because I don’t ever travel on State business. Why are you singling us out? Your logic makes 0 sense.

Grumpy

July 13th, 2009
9:15 am

Ferguson– You’re an idiot! Yeah, let’s cut state employee salaries by 50%. Where do you want to start? How ’bout let’s cut correctional officer salaries by 50%? Then they’ll be getting paid about $14,000 a year to have feces and urine thrown at them. Better yet, why not just fire about half of them? And then when the growing inmate population starts escaping who will you blame then? Or if not correctional officers, how ’bout state patrol? Let’s fire them. Who needs “cops” out there protecting our highways from wreckless and speeding drivers? That’d be great. Or better yet, let’s fire evefryone at tghe Georgia Department of Labor offices around the sdtate so when your miserable gets fired and you need unemployment compensation to keep a roof over your head and food in your fat gut, there will be no employmnet counselor to help you out. Or maybe the folks who issue you your driver’s license. Let’s fire half of them, then you’ll complain when it takes you weeks to get your license renewed.

Ferguson- You obviously don’t have a clue what state employees do for ingrates like you. Before launching off into some kind of mindless diatribe like cutting salaries by 50% and firing more than have already been laid off and furloughed, get your facts straight, bone-brain!

GaNative

July 13th, 2009
2:09 pm

Grumpy, they should fire everyone at the GA Department of Labor. I’ve been through the bs with them. They side with the companies when it comes to their pitiful arbitration that is held over the telephone. Everyone one of them should get their azz fired to see how it is to be unemployed and without.

GMan

July 21st, 2009
8:46 pm

Lets be honest, only about 1 in 3 state employees are great employees that are looking out for the best interests of the state and citizens. The other 1/3 is just there for a paycheck and benefits, the 1/3 is completely useless. I say take a chapter out of the GE book. Fire bottome 10-20% of employees with lowest ratings and reward the top employees. Just like in life. I bet that saves millions of dollars and increases the value of services all state agencies provide. And, remove all unions. They are true barriers to real change and the only last protected class is the public sector, but everyone has their day. Just look at the steel industry, auto, manufacturing, etc, etc. Fire 20% and reward the top 20%. We’ll have the best run state in the country.

Okiesavannahgirl

July 22nd, 2009
7:32 pm

I am a state employee.I do medicaid for aged, blind, and disabled. I try to find the people I serve, most who are poor, old and sick, other avenues to be able to eat or find discount medicines or pay reasonable rent. Fat Chance! I love my job although the state has never made it easy on us at DHR. They cut back our budgets yet we have to process more people for food stamps and medicaid than ever before. We have not had a raise in a couple of years and when we did it was a whopping 2.5% which let me tell you is nothing. I cannot afford to pay back student loans on my salary, and it is all I can do to keep my head above water now. My vehicle is 15 yrs old. I do not really waste my money but I am telling you, if I am having a hard time, I can’t even imagine how my clients are making it. We need more housing for our elderly, they need to get the maximum amount of food stamps so they can afford to buy their medicine or pay their medical bills that medicare does not pay for. It is a sad state this country is in and the bad thing is when I am old enough to retire my benefits will amount to approximately 600.00 a month. How sad…I will be one of those poor elderly people too along with alot of others besides myself…