Today, all levels of government are short on revenue. The major portion of the state’s revenue collection comes from individual income taxes and sales taxes.
Unemployment is up which means a shortfall in both income and spending.
The year-to-date income tax is down 14.9 percent ($1.03 billion) and state sales tax is down 14.2 percent ($847 million).
This would be a $2 billion short fall except people are driving more (excise tax on fuel is up $3 million), drinking more (alcohol tax is up $1.3 million), and a few other items are up making the real short-fall $309 million for the first two months of this fiscal year. This puts us on track for a budget deficit of $1.8 billion. Last year we ended with a deficit of almost a billion dollars from the original FY 2009 Budget.
The state’s revenue picture going into the 2010 Legislative Session is still grim. That is why the Gold Museum’s operating time was cut by DNR. Many programs have been cut — everything from tourism and economic development to revenue agents. They will continue to be monitored until we convene the 2010 Legislative Session in January.
When the General Assembly convenes in January, we will look at two budgets: the FY 2010 Amended Budget and the FY 2011 General Budget. The primary purpose of the amended budget is to increase funding for school systems whose enrollment is larger than expected; however, the governor always suggests other changes for the House and Senate to consider. The FY 2011 Budget will be based on the governor’s revenue projections, and at the moment, they don’t look good.
In spite of the growth in population, Georgia’s revenue collection and spending are at the 2006 level. Georgia ranks 49th in spending based on dollars per capita.
Only one other state spends less per capita. If we eliminate the federal and state specified dollars, e.g., lottery funds; more than 50 percent of the FY 2010 Budget is earmarked for K-12 education. When compared to the hits the other departments had to take, very small cuts have been made to this piece of the budgetary pie.
Last Session we passed several important education reform bills. The most significant in terms of potential cost cutting was HB 193. This bill allows school boards the flexibility of changing the length of school days as long as the number of hours meets the 180 day requirement. Some school systems added a few minutes to each day so they could start school after Labor Day.
Other systems have gone to four-day weeks, thereby cutting their non salary expenses by at least 15 percent. At least one system is taking every-other Friday off.
With the number of people out of work on the rise, most of the people I talk with tell me not to raise their taxes. They continue to express the desire to have both the property tax and income tax lowered or removed. At least one of the candidates for governor is expressing a desire to swap the income tax for an increase in sales tax. If that happened, Georgia would become the first “flat tax” state.
During the next Legislative Session, I believe we will get another opportunity to vote on a property assessment freeze. We will need Democrat support to change the constitution.
Last year the vote fell a little short. The author of the bill to eliminate ad valorem taxes on personal vehicles thinks that the Senate will finally pass the House version.
Rep. Amos Amerson can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533; (706) 864-6589; E-mail hamerson@windstream.net.