Originally created 11/05/04

Perdue says Georgia's economy is improving

ATLANTA - Gov. Sonny Perdue told government agency heads Thursday he is optimistic the state's fiscal health will continue to improve in coming months, but he stopped short of saying budget cuts would be off the table in the upcoming legislative session.

The state's tax collections in October increased 5.5 percent over the same period last year, according to figures released shortly after Mr. Perdue's speech.

"We know our economy is improving," he said in his quarterly meeting with the leaders of the state's various departments. "We're a little hesitant about claiming victory."

Earlier this year, Mr. Perdue instructed state agencies to craft three budget proposals for the fiscal year that begins July 1: one assuming a 5 percent budget increase, one based on no change at all, and one crafted around a 3 percent reduction.

The 3-percent proposals led to some controversy in late summer as the public saw such proposed cost-saving moves as closing several state parks, reducing medical services to the poor and disabled, and raising tuition for state universities in the middle of the year.

However, Thursday's figures showed the state's tax collections from July through October are roughly 11.5 percent above where they were in the same period of 2003.

Mr. Perdue said he anticipates state revenue will grow an average of 6 percent during the current fiscal year, which ends June 30.

Mr. Perdue thanked agency leaders for their willingness to place certain state programs and even a few jobs on the budget chopping block, despite signs of rosier economic conditions down the road.

"With your help, I think Georgia is healthy; Georgia is safer ... and more prepared for growth in our future," he said.

Still, Revenue Commissioner Bart Graham warned more budget cuts could be needed, depending on how the economy performs in the coming months.

"If you had a weak holiday season, it could reverse (these gains) in totality," Mr. Graham said at an afternoon news conference.

The General Assembly reconvenes in January, when lawmakers will use Mr. Perdue's budget recommendations to hammer out a fiscal plan for the coming year.

Reach Brian Basinger at (404) 681-1701 or brian.basinger@morris.com.


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