State tax collections plummeted in August

By James Salzer

The Atlanta Journal-Constitution

State tax collections plummeted in August as the fiscal recession continued.

THE FIGURES

Overall collections were down 16.4 percent, or $207 million, from August 2008. Sales tax collections dipped 12.5 percent. Income tax revenue dropped 20.8 percent, in part because the State Department of Revenue was still issuing refunds from income tax returns filed last spring. Corporate income taxes were down only 1 percent and they are actually up for the fiscal year, which began July 1.

WHAT’S IT MEAN?

For the state, not much right now because it’s still early in the fiscal year. However the numbers show sales of taxable goods, such as clothing, furniture, etc., remained slow through the summer.

THE BIG PICTURE

Gov. Sonny Perdue has already ordered budget cuts. If the state continues to see double-digit drops in tax collections into December and January, it’s likely Perdue and lawmakers will seek to cut spending even more because the government doesn’t have a lot right now in reserves.