ATLANTA — Georgia's economist and budget director had little good news to report to lawmakers Thursday on the state economy.

Budget writers have anticipated a big hit to the economy after coronavirus shuttered the state, and April tax revenue numbers released Wednesday showed just that — with economists predicting worse to come.

Compared to this time last year, Georgia is down more than $1 billion in state revenue or 35.9%.

“I know we’re going to get through,” House Appropriations Chairman Terry England, R-Auburn, said. “It’s not going to be pretty or pleasant but we’ll get there.”

Jeffery Dorfman, state fiscal economist, said he can’t answer the question of when the economy is going to go back to “normal,” but one thing is clear: the rebound of the state’s economy is almost entirely dependent on consumers.

“For our economy to get back to normal it’s going to require consumers to be confident again,” he told lawmakers during their virtual meeting Thursday.

Polls still show widespread fear of using public transit, going to malls and taking vacations, he said. According to state numbers, tax collection for the hospitality sector has decreased by 56%, restaurants and food service by 27% and general retail purchases by 50%.

But April tax collections really only give a picture of what has happened since mid-March.

“May should be worse,” Dorfman said. “Because it's really April collections when we were shutdown for pretty much the whole month.”

Dorfman expects an additional $12 million to $15 million in revenue to the state from the marketplace facilitator bill that passed this session and went into effect April 1 — but it won’t be enough to lessen the blow of the pandemic.

“It’s a lot better to have an extra $15 million a month than not,” he said. “But that’s not going to save you from the hard choices you and your fellow legislators are going to have to make.”

Since the recession has been driven by mandated shutdowns and not direct economic failure, Dorfman said, he is hopeful that when the state’s businesses get back into full swing, the economy will bounce back quickly.

“I think there are big differences between an economic-driven recession where something's wrong with the economy and what we're having now which is a mandate-driven slow down,” he said. “But, frankly, the last time anything like this happened was the Spanish Flu in 1918 and amazingly enough we actually don't have any economic data for that. So, we don't really have a good idea, based on history of how this is going to go.”

Kelly Farr, Gov. Brian Kemp’s budget director, told lawmakers that April tax revenue numbers were “very worrisome and very troubling” and the state won’t know the full impact until after Memorial Day.

The state has taken a significant hit from individual income tax after the federal government moved the filing data from April to July 15. Georgia saw 526,000 fewer individual income tax filings this April compared to last year, Farr said. Corporate income tax collection will continue to be a challenge as large businesses are expected to have ongoing losses.

Farr said to make up for the lack of revenue, lawmakers may have to start dipping into the state’s rainy day fund. Luckily, after cuts at the beginning of the session, he said, it may not have to be as much as it could have been.

Year-to-date, the state is down $680 million in net tax collections which is expected to fall even further.

The only silver lining to be seen, he said, is a slight increase in alcohol and tobacco tax revenue.

“During this time of being at home and maybe not having as much to do as we normally would, tobacco and alcohol taxes performed fairly well,” Farr said. “So, people are living it up at home and I’m glad they are.”

Lawmakers knew this was coming and have already taken steps to reduce the need to dip into reserves.

Last week, England and Senate Appropriations Chairman Blake Tillery, R-Vidalia, along with Farr alerted state agencies they will have to cut 14% from their Fiscal Year 2021 budget which begins July 1 — totaling the cut to $3.5 billion out of the state’s budget.

Earlier this week, House and Senate budget members sent a letter to the state echoing calls for additional federal aid to support local governments.

Lt. Gov. Geoff Duncan announced he will take a 14% pay cut to his salary in light of the cuts being asked of state agencies.

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