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Sales tax holiday expected to return

By Johnny Jackson

jjackson@henryherald.com

Georgia could save millions in tax dollars by ending its annual sales tax holiday, but lawmakers looking to plug a $2 billion budget hole may be willing to do without the extra cash.

According to officials, the state loses about $13 million in revenue each year it institutes the weekend-long period, when sales tax is not charged on a long list of items.

For the last several years, state lawmakers have adopted a bill to exempt consumers from sales and use taxes over four days leading up to the start of the school year. The tax holiday helps give relief to consumers who have to pay for back-to-school items, including school supplies, clothing, footwear, and computers.

State officials, however, are looking for relief of their own.

The state's fiscal year 2009 budget has a $2 billion hole that gets deeper with every monthly revenue report. To date, the state has attempted to cut about 10 percent of its $21 billion budget to make up for revenue losses.

Gov. Sonny Perdue announced, on Feb. 6, the net revenue collections for January totaled $1.5 billion compared to $1.8 billion the year before, a decrease of 14 percent in revenue for the month.

State officials are anticipating lawmakers will pass the tax holiday bill again, despite those revenue losses.

"The January numbers are troubling and indicate a troubling trend," said Perdue spokesman Bert Brantley. "[However,] when we built the 2010 budget, we assumed those holidays in our revenue projection. We have built into the 2010 budget the assumption that the tax holiday would be there."

The potential tax savings would be a small percentage of the state's shortfall.

"I think people understand that the national economy is still struggling, which obviously has an impact on state budgets," Brantley said. "We've got to match up revenues with expenditures."

A share of the state's budget cuts has come at the cost of education, which represents more than half the state's budget each year. Many of those directly impacted by state education cuts would also be those who could benefit from the continuation of the annual tax holiday.

"We'll be working on looking at these things over the next couple of days to see what the right step forward is," Brantley said. "While we would love to not impact education, there's no way to do that. There's no other option."

Henry County Schools Superintendent Michael Surma said he is hopeful the state, and nation's, economic hardships will subside soon.

He said teachers have just enough to provide the basics in education.

"If I ask a teacher if they have everything they need, the answer is usually yes," said Surma. "If I ask them if they have what they want, the answer is usually no. We're going to make every effort to employ our full-time, full-year employees."

The Henry County School System is currently seven months into its fiscal year 2009 budget. The school system expects to be down $5.8 million this year from its initial budget projections, set in July 2008.

"This is a dark and dismal day in the economics of Georgia," Surma said. "These are very challenging times. Our focus is to make sure we have our classroom teachers in classes and make sure they have the materials they need to educate the children.

"For the kids out on the playground, that's what it's about," he said.