Economic woes hitting home in GA - WALB.com, Albany News, Weather, Sports

Economic woes hitting home in GA

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By Wainwright Jeffers - bio | email

July 17, 2008

ALBANY, GA (WALB) - Georgia's economy is going through a tough time. Governor Sonny Perdue dipped deep into the state's reserve fund to keep the budget balanced, and this fiscal year's budget just went into effect two and a half weeks ago.

The state is in trouble because revenue collections are far from revenue projections.

And the less we spend the less the state collects.

New Revenue Figures for June showed the state 168-million dollars less that it did last June. That's a decrease of almost 10%.

Even though the new budget year just started, the Governor ordered the transfer of 600 million dollars from reserves to cover expected shortfalls.

"Now instead of running a budget deficit, they're able to balance the deficit without making additional spending cuts," said Aaron Johnson, Assistant Economics Professor at Darton College.

Johnson said not dipping into the reserves could have caused problems.

"As far as additional support for school you don't think about tuition, over crowding of jails, and court systems being bogged down with various cases. I mean there are costs that we sometimes as citizens don't see," said Johnson.

Dale Saunders owns Flint River BBQ, he said spending at his restaurant is not following in the economy's footsteps.

"Our business is doing great right now, no complaints," said Dale Saunders, Owner of Flint River BBQ. 

Saunders had even expanded the restaurant, but says he's feeling the pinch of high food prices, but isn't ready to pass bill onto his customers.

"We haven't gone up on menu prices we're going to see what happens, there's enough trouble out there now," said Saunders.

The hope is that more spending will take place in Georgia to not only jump start our economy but the nation's.

"You know it's hard to spend more when your hours have gotten cut, it's hard to spend more when gas prices are so high," said Johnson.

After that reserve transfer, the state will have about 900 million dollars left in reserves. Professor Johnson says the state can't afford to continue to use reserves, so deep spending cuts could come if the economy doesn't pick up.

Even though state sales tax collections were down more than 17% in June, motor fuel tax revenue was up more than 69%.

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