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Revenue collections continue falling
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ATLANTA — Georgia's tax collections plummeted sharply again in June, leaving the state's bank account more than $1.9 billion below where it stood this time last year and forcing Gov. Sonny Perdue to dip even deeper into dwindling reserve funds.
The announcement that state tax collections for June dropped by 15.7 percent from the same month a year ago led to fresh calls from a budget analyst for a special legislative session to grapple with the state's financial woes.
But legislative leaders have discouraged the idea and Perdue's aides said again Friday that the governor has the power to handle the falling revenue without calling lawmakers back to the Capitol.
“I don't think it increases the odds of a special session,” said Perdue spokesman Chris Schrimpf. “The governor has the tools necessary.”
As Georgia's tax collections have plunged amid the souring economy, Perdue has asked state agencies to slash budgets by 25 percent for the month of June and another 3 percent in July. Agencies have heeded his call, although the judicial branch threatened a lawsuit in June to stave off the cuts until a compromise was brokered.
Perdue has also relied on the ever-thinning budget reserves.
Georgia began the last fiscal year, which ended June 30, with about $1 billion in its rainy day fund. Officials expect that by this time next year, all but about $200 million of it will have been spent.
That will leave a perilously thin cushion, analysts say.
“The reserves are dangerously low and this leaves us with little leeway for error,” said Alan Essig of the Georgia Budget and Policy Institute, a nonpartisan think tank. He said legislators have little other choice but to return to the statehouse and overhaul the budget.
“I think lawmakers have a responsibility to come back,” he said. “There needs to be a fundamental rethinking of the budget.”
Perdue has said he would consider calling a special session if legislative leaders reach a “consensus” that one is needed. He plans to meet with them next week, but leading lawmakers have said a special session is not likely.
“Maybe a wise direction would be to all agree on what cuts to take, what path we should take, and give our public agreement to our governor’s plan, and announce that'’s the way it will be handled,” state Sen. Jack Hill, the chair of the Senate’s budget-writing committee, said earlier this week.
Still, Friday’s figures will give them little encouragement. Corporate income tax receipts dropped $248 million — more than 26 percent — between fiscal year 2008 and 2009. And individual income tax receipts fell by about $1 billion, or about 9 percent, over the same period.
“It's not good,” said Essig. “And there’s no sign of it getting better.”
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