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Tuesday, March 9, 2010 - 6:49am

Cuts Alone Not Enough, Need More Revenue

Budget cuts alone will not solve the state’s financial problems.

House Majority Leader Jerry Keen (R - St. Simons) told GPB’s Lawmakers about several measures the legislature is considering to help shore up the state’s revenues. February revenue figures released yesterday show the state’s revenue collections continue on a downward spiral and it is now estimated that the state will have more than a $1.1 billion shortfall.

Among the revenue generating measures the legislature is considering:

1. Increasing fees. For example, requiring grocery stores to pay for required inspections by the Department of Agriculture and/or requiring a fee for identification badges created for lobbyists by the State Ethics Commission. Keen hopes that fee increases could generate as much as $100 million in new revenues.

2. Imposing a Cigarette Tax. Keen does not support the current proposal of a dollar per pack, but thinks that a lesser tax, imposed by Constitutional Amendment, should be considered. He also believes that the State should dedicate those revenues generated by the tax to paying for tobacco-related illness.

3. Rolling back tax exemptions for not-for-profit hospitals. Although Keen says that several measures are being considered involving Medicaid funding- including Governor Sonny Perdue’s 1.6 percent hospital “bed tax” or decreasing Medicaid reimbursements to doctors; he feels that the best solution may be rolling back tax exemptions for over 120 no-for-profit hospitals in Georgia.

4. Eliminating the back-to-school sales tax holiday. Since 2002, the legislature has voted to create a sales tax holiday during the “back-to-school” season for clothing, school supplies and certain electronics. Rolling back this sales tax exemption and others- including the exemption for energy efficient products- could generate as much as $35 million.

At this time, the legislature is also looking to use monies from the FY 2011 budget to balance a shortfall of $200-300 million in the FY 2010 budget. It seems clear that the Georgia General Assembly will continue their work to find new revenues, budget cuts and more efficiency in state government.

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