State income won't return to pre-recession levels until 2014, economist says



ATLANTA — Georgia’s economy is slowly recovering, but the income collected by the state government will probably not reach pre-recession levels until 2014, the state’s fiscal economist told lawmakers Tuesday.

Kenneth Heaghney gave his assessment of Georgia’s economic outlook to a joint committee of legislators reviewing budget plans submitted last week by Republican Gov. Nathan Deal.

Those plans anticipate that Georgia will see moderate growth as the economy recovers in fits-and-starts from the worst recession nationally since the Great Depression.

“We do believe our economy will keep growing and gradually gain strength,” said Heaghney, a professor at Georgia State University.

Still, he cautioned that an ongoing debt crisis in Europe, spikes in oil prices and a weak housing market in Georgia could prove a drag on the recovery.

“So those are things that could go wrong and affect our national economy and by extension our Georgia economy,” he said.

Monthly reports from the state government show revenue collections had increased for 18 months in a row until a drop in collections last month. Those financial figures are generally viewed as a rough benchmark for economic activity. The more income that people earn and the more money that consumers spend, the more funding Georgia’s government collects in tax revenue and other fees.

Deal said the state collected an unusually large number of payments from corporations in December 2010, which made last month’s comparisons appear bleaker than they really were.

“I think the key indicators are that in spite of that,” Deal said, referring to the dip in collections for December, “that we are seeing the economy stabilize.”

While Deal has called for new state spending in his budget plan, he pushed back against criticism that his administration was significantly increasing spending. He said his budget would eliminate a state office and sell the state’s fixed-wing aircraft, and added that the state has trimmed its workforce.

“We are providing more services with fewer resources,” he said.


Thu, 08/17/2017 - 23:54

Rants and raves