State ends 15-month slide with positive revenue news

By Aaron Gould Sheinin

The Atlanta Journal-Constitution

In a glimmer of good news, Georgia has ended its 15-month skid of negative revenue numbers.

Though overall tax collections in March rose by just 1 percent over 2009, it's the first positive signal on revenue collections since November 2008.

However, the numbers, reported by Gov. Sonny Perdue's office, aren't nearly enough to make a dent in the state's budget woes.

"While we are always cautious about reading too much into a single month's revenue report, the March numbers are certainly encouraging," Perdue said in a statement. "Springtime in Georgia always brings us the Masters and the Braves' opening day, and I am hopeful we are also seeing the first buds of economic recovery."

Revenue collections were boosted by a surge in corporate income tax payments and a modest bump in gross sales tax collections. Businesses paid 9.8 percent more in income taxes in March than a year ago, which translates to a net gain of $11.79 million. While gross sales tax collections rose by 1 percent, overall sales and use taxes were down by 11.6 percent, the difference coming from a $52 million increase in sales tax distributions to local governments.

Individual income tax collections continued to fall, however, a sign that the job market remains problematic at best for many Georgians.

Explanations for March's positive news are not easy, but March 2009 was itself a bad month -- tax collections that month were down more than 14 percent over March 2008.

An analysis of March 2010 by the Department of Revenue shows that corporations paid $14.5 million more in estimated tax payments last month than a year ago.

Certain segments of the sales tax spectrum outperformed others, as well. While sales tax collections from food, accommodations, automobiles and home furnishings were all down over March 2009, the "general merchandise" category saw improvement of more than $6 million. General merchandise is the largest sales tax category, responsible for nearly 15 percent of all collections.

While the monthly news is good, overall the fiscal year remains a disaster. State tax collections for the budget year that began July 1 are still off by nearly $1.34 billion from the same period in 2009.

The news is unlikely to change much at the Gold Dome next week when lawmakers return from spring break to tackle the state budget, as the net increase of $10.52 million in March will make hardly a ripple in a $17 billion spending plan for the current fiscal year, or the $17.7 billion proposed to be spent in fiscal 2011.

Here is a look at how March compared to the same period a year ago:

Individual income tax collections

March 2010: $345.01 million

March 2009: $354.06 million

Difference: -2.6 percent

Corporate income tax collections

March 2010: $132.41 million

March 2009: $120.62 million

Difference: +9.8 percent

Sales and use tax collections

March 2010: $724.01 million

March 2009: $716.83 million

Difference: +1.0 percent

Fiscal year to date (July 1-March 31)

Overall tax collections: $10.26 billion

Same period a year ago: $11.59 billion

Difference: -11.5 percent