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Hill: March revenues no better
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March revenues released this week declined 14.3 percent or -$167 million. The last four months have averaged over a $200 million decline, so the rate of decrease is less. But, if the present trend continues, the state will not make the ’09 budgeted target and state reserves of only $562 million will be drained.

Individual income taxes, half of revenues, continue to show sharp declines this month at -18.8 percent. This revenue source contains employee withholding taxes and taxes by small businesses and individuals.

Sales tax collections declined by 14.4 percent. Corporate tax collections were down for the month 23.6 percent or $37 million. Fuel tax collections declined by $23.4 million or 28.6 percent.

Year to date, total collections show a 8 percent decline which sounds better until you remember we are budgeted at a -7 percent reduction.

Individual income taxes show a -8.8 percent for the year, sales taxes a 6.3 percent decline and corporate taxes are down 35 percent, motor fuel collections of both excise and sales taxes are down for the year $77 million. Any shortfalls under budgeted amounts have to be made up from general revenues; or in this year from the shortfall reserve fund.

If the negative trend of the last few months continues, the state will likely use up the majority or all of the $562 million in reserve funds leaving nothing in reserve for the 2010 budget year.

2010 state budget — deep cuts across the board, few adds
The FY 2010 state budget passed, which contained few additions and continued 8 percent-plus cuts government wide except for k-12 education which took only a 3 percent cut. The $3.3 billion hole in the budget was filled by $476 million in reserve funds, $1.2 billion in federal stimulus funds, $88 million in one-time funds, and $1.3 billion in cuts to agencies.

This budget:
• Fully funds Medicaid for the full year per current projections

• Restores the 10 percent cut to hospitals statewide

• Restores the 6 percent cut to Medicaid providers also in the governor’s budget

• Restores funding for school nurses

• Continues funding at base salary level for National Board Certified Teachers

• Contains no cuts that would cause teacher furloughs

• Does not change present state health insurance benefits

• Leaves approximately $1 billion of federal stimulus funds for the critically short FY11 budget

• Provides 3,000 new slots for the lottery funded pre-k program — $350 million in lottery funds

• $1.2 billion in bonded projects for infrastructure including ports and water and sewer loans and other building projects

• Funds $297 million in k-12 capital outlay school projects

• $534 million in building projects for higher education including $37 million for new libraries statewide

• Restores cuts for services for the elderly for “Meals on Wheels”

• Restores funds for respite care for families of Alzheimers sufferers

• Provides additional MRWP waiver slots to “unlock the waiting list”

• Restores cuts to Public Defenders Council for critical needs

• Restores funds to protect Wildlife Management Area federal leases

• Enhances consumer protection inspectors for the Department of Agriculture

• Contains additional marketing funds for tourism

• Gives Department of Natural Resources latitude to manage state parks, golf courses and lodges to be sustainable

• Budgets for the new Department of Behavioral Health and for the transfer of the Public Health Department to DCH

• Funds HOPE scholarships of over $500 million for public and private colleges

• Bonds $100 million in road projects statewide (additional to $900 million in stimulus road funds)

There are no “pork” or “earmark adds” in this budget.

It would be an optimistic view to believe that more budget revisions are not necessary this summer.

In the coming weeks, we will examine legislation that passed or failed this session.

I may be reached at
234 State Capitol, Atlanta, GA 30334
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(404) 657-7094 (fax)
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Reidsville office: (912) 557-3811