Georgia's February tax revenue has taken a hit, leaving the state to grapple with a continued financial slump. Figures released underscore a 4.3% decline compared to the same month last year. Despite the drop, Gov. Brian Kemp signed off on a hefty $37.9 billion midyear budget, banking on the state’s sizeable financial reserves to balance the books, according to The Atlanta Journal-Constitution.
Although the fiscal year-to-date collections have crept up by 1.1%, a closer look reveals that, minus the revenue from fuel taxes, the numbers are actually down by 3.4%. This concern is further exacerbated by a significant 19% drop in individual income tax collections, the lifeline of the state’s revenue stream. On the flip side, sales tax collections did see a rise of 3%, offering a glimmer in a generally dim financial portrait, as The Atlanta Journal-Constitution reported.
The latest budget includes a splurge on statewide initiatives from renovating the Capitol Hill to funding a new medical school at the University of Georgia. These plans move ahead even with the knowledge of a revenue deficit and the state's constitutional requirement to keep its budget balanced.
In a separate account of the situation, Jacksonville.com reported legislative leaders are opting to slash spending rather than raise taxes in response to February's disappointing 9.9% fall in tax collections. "The only way to solve this is to grow the economy," Senate Majority Leader Chip Rogers told a no-tax rally, ruling out tax hikes and focusing entirely on economic growth to counteract the fiscal draught.
The dip in collections comes after a period of soaring revenues and surging growth that had previously seen the state's budget increase. However, as the current downturn continues and hopes for a reversal in trend fade, lawmakers are forced to double down on austerity measures. Both House and Senate leaders appear inclined to dig deeper to find areas where spending can be cut, as economic stabilization remains the top priority.
