Tax collections continued to plummet in July as the new fiscal year brought no financial relief for state officials.

Overall, collections were off 6.6 percent, or about $86 million, from July 2007. The new fiscal year began July 1.

The bad news continued in two areas that provide strong indicators of the strength or weakness of the economy: income and sales taxes.

Personal income taxes were off 6.5 percent from July 2007, and corporate income taxes fell 62 percent for the month.

Sales tax collections for July slipped 5.3 percent. Food, lumber, autos and home furnishings all saw big sales tax declines.

Gas-tax collections were down as Georgians bought an estimated 28 million fewer gallons of gas in July than in July 2007.

July's figures came on the heels of several months of poor collections.

In the final three months of fiscal 2008, overall tax collections were off 7.3 percent, according to the Georgia Department of Revenue.

Gov. Sonny Perdue wound up having to use 40 percent of the state's $1.5 billion in reserves to pay the bills at the end of fiscal 2008.

Since mid-July, Perdue has ordered state agencies to come up with plans to cut 6 percent from their budgets. Medicaid and K-12 education are having to make smaller cuts. However, lawmakers say more may still have to be done to keep the state's books balanced over the next few months.