More trims possible as state revenues dip

ATLANTA --- Georgia's economy continues to sputter.

Gov. Sonny Perdue reported Friday that state revenues tumbled again in August, down 7 percent from the same month the year before. For the fiscal year that started July 1, tax collections plummeted 6.8 percent -- or more than $180 million.

The financial snapshot released Friday was bleak. All major revenue streams were down sharply in Georgia including sales, income and corporate taxes.

Georgians were buying less food, clothing, furniture and automobiles, the state data showed,

"You are looking for a light at any point and so far we haven't seen that light," Mr. Perdue said.

The Republican governor has already ordered state agencies to trim spending by 6 percent to close a projected $1.6 billion budget gap this year. Agencies have also been told to draw up plans for even steeper cuts, and Mr. Perdue said unless the flow of money into state coffers picks up, those additional cuts could be needed.

The state plucked $600 million from its reserves to stay in the black for the previous fiscal year as Georgia's economy began to sour.

Mr. Perdue said Friday he has no immediate plans to release $428 million in homeowner tax relief grants, despite complaints that his failure to do so could lead to higher property taxes. The grants are distributed to local governments and designed to keep property taxes down. Local governments have already passed that tax savings along to homeowners. State lawmakers have pledged to restore the funds to keep local governments from being forced to boost property taxes to make up the shortfall in state funds.

But Mr. Perdue argued that, at least for now, the money isn't there.

The revenue numbers come a day after the state reported a jump in first-time jobless claims rivaling those that came in the aftermath of the terrorist attacks of Sept. 11, 2001. There were 50,090 first-time unemployment claims in August, an increase of 72 percent from August of 2007.

State money managers reported Friday that income tax collections are off by 6.5 percent for the first two months of the fiscal year. Sales tax revenues have dropped 8.5 percent. And corporate income tax has fallen by more than 33 percent.

Motor fuel taxes, which fund road and transportation projects, have dipped 7 percent. State Revenue Commissioner Bart Graham said that appears to be a result of Georgians buying less gas, presumably because they are driving less.