In 2005, Georgia collected $15 billion in taxes. Four years later, that number has barely budged.
The recession shrank tax collections even as the population grew by more than 850,000 over four years, pushing the state toward a budget deficit estimated between $300 million to $500 million. This, despite $900 million in emergency cuts last summer.
The pain has spread widely. Teachers and state employees were forced to take furloughs. The public health system has 600 unfilled job vacancies and a severe funding shortage "at a time of incredible need," said Russ Toal, Georgia Public Health Association president.
The level of public services has fallen, acknowledged Bert Brantley, a spokesman for Gov. Sonny Perdue, R. "In a down economy, it's a time when people need them the most."
"A lot of tough decisions have already been made," Brantley said. "Everyone is bracing for the potential of more cuts."
Budget cuts have made Rachel Hilliard's job a lot tougher. A long-term care ombudsman, Hilliard and a colleague serve about 4,000 patients in 124 facilities in 17 counties south of Macon. They visit residents at nursing homes, assisted living facilities and group homes and respond to their complaints. Budget cuts hit the ombudsman program statewide by $500,000--and eliminated a third staffer in Hilliard's region.
With a heavier workload, Hilliard said, "It's harder to do quality work. It's the residents who are suffering."
The state budget was propped up this year by federal stimulus money and reserve funds. But stimulus dollars will end next year and the reserves have been depleted. And by law, the state must balance its budget.
"Things are really bad now, but we're heading toward a cliff," said Sarah Beth Gehl, deputy director of the Georgia Budget and Policy Institute, a nonprofit think tank.
The institute argues it is time for Georgia to follow the lead of 32 states that increased taxes or fees in 2009. North Carolina, for example, raised $1 billion with a temporary increase of its sales tax and income tax on top earners, plus permanent increases in alcohol and cigarette taxes.
In recent years, Georgia ranked in the bottom 10 states for state government spending per capita and for taxation. And while the population has grown, government spending is on track for a double-digit percentage drop.
To raise more revenues, the institute suggests increasing the cigarette tax, temporarily raising the income tax on high earners, suspending some tax credits, and taxing household services such as dry cleaning and auto repair.
AARP Georgia supports increasing the cigarette tax by $1 a pack to raise $400 million. Seven in 10 Georgians have consistently supported such an increase.
"I'm asking our members to connect the dots--to connect the lack of revenues to the services that are disappearing," said Kathy Floyd, AARP Georgia associate director for advocacy. With a worsening budget crisis ahead, she added, "They're going to have to look at some revenue possibilities."
AARP also backs a proposed review of current state tax breaks and their effectiveness. For example, Delta and other Atlanta-based airlines get a jet fuel tax break worth more than $20 million.
However, anti-tax sentiment runs strong in the GOP-controlled General Assembly. Senate Majority Leader Chip Rogers, R-Woodstock, opposes new taxes and said job creation should be the state's top priority. Rogers backed a bill last year that would have given companies tax credits for job creation. It was vetoed by Gov. Perdue.
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