by Bill McBride on 10/14/2007 08:48:00 PM
Sunday, October 14, 2007
From The Atlanta Journal-Constitution: Housing slump affects sales tax collections
Georgia's tax collections fell slightly last month, following a trend across the country where the housing slump has begun to affect state budgets and sparked talk of spending cuts for education and health care.
Collections in Georgia were down $2.3 million in September, compared to the same period in 2006. Sales taxes dropped 10.6 percent. For the first quarter of the fiscal year, which began July 1, overall collections are up 5 percent, or $199 million. The state needs a growth rate of 5 percent or more for the rest of fiscal 2008 to meet its $20.2 billion budget.
Income tax collections rose 5.1 percent last month. However, sales tax collections - which are tied to consumer spending - faltered, dropping $47.6 million over September 2006.
"A big chunk of that is related to the housing downturn," said Kenneth Heaghney, the state's fiscal economist. "The lumber sector is down, building materials are down, and the home furnishing sector is down. That seems to be taking a chunk out of .... the sales tax numbers."
Posted by Bill McBride on 10/14/2007 08:48:00 PM