Friday, October 8, 2010

September Revenues Up, But Long Road to Full Recovery

State revenues in September were up 5.7 percent over revenues in September 2009, according to data released by the Georgia Department of Revenue. That is certainly good news, but Georgia has a long road to recovery in revenues.

Net revenues in the first quarter (July-September) were 7.4 percent above first quarter 2009 revenues. However, fewer income tax refunds were issued in the first quarter of 2010 compared to 2009, giving 2010 a temporary boost in July and August. Removing the anomaly of fewer refunds, gross revenues grew by 1.9 percent in the first quarter. The revenue estimate for the fiscal year is currently set at 4.2 percent.

"Consider a worker who has his pay cut by 20 percent, and then receives a 5 percent raise. The pay raise is great news, but he is still going to have trouble paying his bills, much less saving for his kid's college education," said Alan Essig, executive director of the Georgia Budget and Policy Institute. "That's what the state faces today. Revenues are growing, but we have a long way to go to regain the ground we lost. The state will continue to struggle to pay for essential services or invest in infrastructure unless leaders reform and improve our tax structure."

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