Tuesday, June 10, 2008

State of Georgia's Revenue Collecctions for May 2008 Cause Concerns

State of Georgia's Revenue Collections for May 2008 Cause Concerns: Governor Should Appoint Commission to Study Revenue Structure

The latest Georgia revenue figures released by the Department of Revenue show that revenues have declined by 0.1 percent through the first 11 months of the fiscal year. The Governor's FY 2008 revenue estimate is based on revenue growth of 2.7 percent. If revenue growth remains flat in June, the FY 2008 Georgia budget will be facing a $500 to $600 million shortfall.

"Because of the Governor's wise fiscal management over the past four years, the state has healthy reserve funds. These reserves put the Governor in a position to manage the economically driven revenue shortfalls without cutting vital government services," said Alan Essig, the executive director of the Georgia Budget and Policy Institute. The Revenue Shortfall Reserve (RSR) contains over $1.5 billion. If revenues remain sluggish throughout FY 2009, it is expected that almost all of the $1.5 billion of reserve funds would be needed to cover budget shortfalls.

"The continued revenue slowdown highlights the fiscal irresponsibility of those legislative leaders who proposed significant tax cuts this past legislative session. Along with this slowdown, there are continued needs, such as trauma care, full education funding, the mental health system, and health insurance for children who are eligible but not enrolled in Medicaid and PeachCare. In light of legislators wasting time with politically motivated tax cut rhetoric, the Governor should take the responsible action of establishing a blue ribbon commission to study the revenue and budget realities of Georgia," Essig concluded.

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