Originally created 05/06/04

State budget gets a boost

ATLANTA - The state's financial picture took a dramatic turn for the better last month, with tax collections increasing $168.8 million, or 18 percent, over the same month a year ago, officials said Wednesday.

In addition, a change in the way the state collects withholding taxes from employers pumped an additional $202 million into the treasury, boosting the month's gain from all sources to $370.8 million, up 39 percent, over April 2003.

The change in withholding tax collections is a one-time-only bounce for state revenue, state money managers said.

Still, they said the month's results left them with an increased level of confidence that the state will end the budget year June 30 with at least some money in the bank.

"We can at least catch a breath," said Tommy Hills, the state's chief financial officer. "I don't think we can necessarily say we're breathing easier yet. But we've caught breath here anyway."

The report covers collections through the first 10 months of the fiscal year and brings total collections for the period to $10.7 billion, an increase of 5.6 percent. The state will need to collect about $2.6 billion more in the next two months to meet the budget, which is based on an overall growth rate of 6 percent.

May and June are traditionally big-growth months, Mr. Hills and Revenue Commissioner Bart Graham told reporters during a briefing.

Leading the increase for April were increased sales tax collections - up $42.2 million, or 10.7 percent - and individual income tax collections, which rose by $110.2 million, or 28.6 percent.

For the year to date, the sales tax is up $140.9 million, or 3.5 percent, while the individual income tax is up $294.8 million, or 6 percent.

The change in withholding tax, approved in last year's legislative session, substantially reduces the lag between the time employers withhold taxes from their employees' paychecks and the point at which they turn the money over to the state.

House Democrats called the report good news.


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