Tax collections up for November

By SHANNON McCAFFEY - Associated Press Writer -- Atlanta

Revenues rose $131 million - or 10.3 percent - over the same period the year before, state money managers reported on Friday. The increase was fueled, in part, by a 19 percent rise in sales tax revenues.

Sales tax collections have been sluggish in recent months.

State Fiscal Economist Kenneth Heaghney, of Georgia State University, attributed the jump to consumer volatility. He said officials should not expect the strong showing to continue.

High oil prices and the struggling housing market are making many consumers think twice before making big purchases, Heaghney said. He added that the housing slump has also dragged down sales tax revenues because the sale of construction materials has fallen sharply.

For the fiscal year, tax collections are showing a more modest increase. They are up 5.4 percent from the year before, or $357 million.

In November, income taxes rose 4.1 percent for the month and corporate income tax collections shot up a whopping 415 percent. That huge jump is largely due to a large refund handed out during the same period last year that dragged corporate tax collections down.

Gov. Sonny Perdue reported this week that the state has a $1.5 billion in reserves. He said the well-stocked rainy day fund as evidence that the state's economy is strong and prepared for an economic downturn.

House Speaker Glenn Richardson said the healthy reserve is evidence that the state can afford to pay for a tax cut.

"I believe that we've saved enough for the revenue shortfall reserve account and either we need to expend the moneys or provide tax relief," Richardson said.

Perdue is pushing a $142 million tax cut for wealthier retirees. Richardson wants to begin phasing in his plan to erase the state's property taxes and replace them with taxes on goods and services that aren't currently taxed.

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