Were you delighted by yesterday's news that Georgia's revenues experienced an uptick for the third straight month, a sign that everyone will soon be buying Ferraris and purchasing additional homes, all of which will be located in gated communities?
Well, the Georgia Budget and Policy Institute warns us about getting too excited. The think tank says last month's nearly 13 percent rise over last year's measly collections is thanks to fewer tax refunds being issued — not an increase in revenues.
Put on your Wonk Goggles©:
Revenues in August 2010 were $133.5 million higher than revenues in August 2009. Of that gain, $110.5 million was due to fewer individual income tax refunds being issued in August 2010 than August 2009. Meaning, growth in revenues from an improving economy was only $23 million. Although that $110 million is real money for the month of August and will help the state meet its budget, it is a temporary boost.
Actual revenue growth for the first two months of the fiscal year (July and August) was 1.3 percent, if we remove the anomaly of fewer refunds. The revenue estimate for the fiscal year is currently set at 4.2 percent.
"The one-month revenue gain due to fewer refunds can't mask the fact that we are living under the same reality of 10 percent unemployment and 325,000 fewer jobs than when the recession began," said Alan Essig, executive director of the Georgia Budget and Policy Institute. "Until those employment numbers improve dramatically or until state leaders reform the tax structure, revenues will continue on a very sluggish path to recovery."
So, in other words, we're all eating beans and rice until Newt Gingrich is elected Grand Chancellor of Earth, for life.
The lady cave
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