Ga. revenues continue to plunge for 15th month

By SHANNON McCAFFREY

ATLANTA

Georgia's tax collections tumbled for the 15th straight month, setting the stage for yet more deep cuts to the state's already battered budget.

State money managers reported on Monday that revenues slumped 10 percent from the same month the year before. For the fiscal year that ends June 30, tax collections are lagging 12.7 percent behind the year before, a drop of $1.3 billion.

Legislators -- who spent two weeks in budget hearings trying to trim every last bit of fat from state spending -- have been anxiously awaiting the new revenue report, hoping the numbers might provide a glimmer of hope. Instead, nearly every major category of tax collections declined.

"There's just no way to put a pretty face on it," Lt. Gov. Casey Cagle said in an interview with The Associated Press.

Sales tax collections were off by 12 percent. Corporate income taxes dropped 26 percent and personal income taxes declined 18 percent. One bright spot: Income tax collections were up slightly from February 2009. But a surge in tax refunds going out the door knocked that small gain back into the red, officials said.

For Republican leaders, the grim fiscal landscape provides a test of their conservative resolve not to boost taxes.

Lawmakers are weighing a host of unpopular cuts that could mean higher tuition at Georgia's public colleges, less money for elementary and secondary classrooms and longer waits for those seeking public assistance, like food stamps.

Layoffs off state employees are a certainty, legislative leaders said. And it's also likely whole programs will be eliminated, although it's not yet clear which ones.

Gov. Sonny Perdue is widely expected to lower his revenue estimate in the coming day or so, effectively giving state lawmakers even less money to spend.

State tax collections have withered to the roughly the same level they were five years ago, when Georgia had fewer residents.

"There is no silver bullet," Cagle said Monday. "We've got to cut this budget and we have to live within our means."

The dismal new figures came on the same day supporters of a hike to the Georgia's tobacco tax rallied at the state Capitol. They argue that a $1 per-pack increase to the tax would translate into an additional $354 million for the state every year while at the same time decreasing the number of Georgians who light up.

Georgia currently has one of the lowest cigarette taxes in the nation, at 37-cents a pack.

"It's time we caught up with the rest of the country," said Dr. Len Lichtenfeld, national deputy chief medical officer for the American Cancer Society.

Still, the proposal has met with a cool reception from Republican leaders, some of whom have pledged to balance the budget without increasing taxes.

"I question how dependable a source of revenue the tobacco tax is," House Speaker David Ralston told reporters on Monday. "I think that when you raise the tobacco tax then the first result you're going to get is people are going to quit buying cigarettes."

An anti-tax rally is set to take place at the steps of the Capitol on Tuesday, led by Grover Norquist of the Washington D.C.-based Americans for Tax Reform. That gathering, intended to battle talk of a tobacco tax hike, is sponsored by Altria on behalf of cigarette giant Philip Morris.