Georgia Could See $4 Billion Shortfall Due To Coronavirus
Georgia could face a $4 billion budget shortfall by next summer because of the coronavirus, according to new figures from the Georgia Budget and Policy Institute.GBPI estimates Georgia will lose billions in revenue because of the coronavirus.
The nonpartisan institute projected Monday that state revenue will be short by $1 billion at the end of this fiscal year, June 30. With unemployment expected to remain high, the shortfall next fiscal year could top $3 billion.
GBPI Policy Analyst Danny Kanso said the state will also need to spend money on programs to help out-of-work Georgians.
"We can't cut our way to prosperity. We can't cut our way out of this crisis,” he said. “And we also can't borrow our way out."
Kanso said the state will need more aid from the federal government and will need to find ways to increase revenue.
The GBPI report recommends some options for raising funds, including increasing the cigarette tax from $0.37 to the national average of $1.81 and changing or eliminating some tax credit programs.
“We recommend that the state take a long, hard look in evaluating the return on investment of all the tax credits that we offer,” Kanso said. “Right now, once a tax credit is passed, there is very little look-back or accountability to see how that credit is performing and the effects on state revenues.”
The report highlights an estimated $9.8 billion in foregone revenue from tax credits in fiscal 2020. It suggests restrictions on transferability and deferred use of tax credits, as well as replacing some low-return tax credit programs in health and education with more direct investment.