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Cigarettes and booze little solace for Georgia budget-writers

Maggie Lee
An exterior of Green's Beverages on Ponce Green's Beverages on Ponce. Georgians are finding more money for alcohol during this pandemic, sales tax records show. Credit: Kelly Jordan 
Green’s Beverages on Ponce. Georgians are finding more money for alcohol during this pandemic, sales tax records show. Credit: Kelly Jordan

By Maggie Lee

The extra alcohol and cigarettes that Georgians are buying this year won’t come close to making up the budget damage from the Covid Recession.

“There’s not a whole lot of positive news on this at all,” said Georgia House Appropriations Committee Chairman Terry England, R-Auburn, after a Thursday presentation on the nosedive in state tax collections and employment.

People have bought more alcohol and cigarettes through April this year than they had by the same time last year. That’s according to state data that shows sales tax collections up $8.5 million.

But there’s less driving, so there go the tolls and gas taxes that pay for road works.

And there’s been a smaller selection of shops or restaurants to visit anyway — so, goodbye sales taxes. And as employment and incomes disappear, so do income taxes. Those taxes are part of what pay for the state’s general operations from prisons to K-12 education.

Overall, state tax collections are down about $1 billion compared to this time last year. Some of that is just because of timing: income taxes aren’t due until June instead of the normal April deadline.  But still, the decline is real, it’ll continue to show up in monthly tax figures for a while yet and it is more than $1 billion.

Right now, the state’s budget-writers are planning on a 14-percent spending cut for the year that will begin in July. That would come to more than $3 billion in cuts to things including education, state law enforcement and health care. The state’s budget was going to be about $28.1 billion before COVID-19.

Jeffrey Dorfman, the state fiscal economist and Kemp’s top economic advisor, said that what everyone wants to know is when the economy is going to get back to normal.

“Unfortunately I’m not really going to be able to answer that question for you today,” Dorfman said. “But for our economy to get back to normal is going to require consumers to be confident again.”

And he presented a slide on recent polling: More than half of people are still scared of public transit, malls, vacations and dining. Fear of ordinary shopping trips is about 50/50 right now, he said.

Documents:

April financial summary by Georgia Department of Revenue

Footnote: Motor fuel tax receipts show a rise due to one individual open issue that was settled by the Georgia Department of Revenue, according to state Office of Planning and Budget Director Kelly Farr.  If it hadn’t been there, Farr said, the state probably would have been in a worse position.
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Maggie Lee
Maggie Lee

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

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