Although he’s clearly encouraged by month-to-month increases in state tax revenue compared to last year, Gov. Nathan Deal is taking an admirably restrained approach to that good news.
Speaking Friday in Athens, the governor took note of the fact that state revenue – and, yes, that does mean taxpayer dollars flowing into state coffers – rose by 9.1 percent in August compared to August 2010. That news comes on the heels of news that state revenue in July, the first month of the current fiscal year, was up 7.3 percent over the previous July.
In fact, state revenue has been on the increase for more than a year. Since Deal took office in January, tax collections have increased significantly each month in comparison with the same month of last year.
Deal was cautiously optimistic, telling a small crowd on hand Friday for his remarks that the news “will hopefully bode well for us as we go into the fall.”
In an official statement on the August numbers, Deal said, “The second month of fiscal year 2012 has continued the trend of year-on-year comparison growth. I am particularly encouraged by this month’s results considering the economic turbulence we are witnessing. It is with that turbulence in mind that I remain cautious about the months ahead.”
That official comment reflects Deal’s ongoing attitude about the positive news on state tax revenues.
In June, for instance, he noted that he was “encouraged by the positive trends, but we’ll continue to watch our numbers closely to ensure we maintain a fiscally conservative state budget.”
And in May, Deal’s comments on revenue growth included a statement that he was “encouraged by the positive trends, but we’ll keep working hard until our job growth is just as strong as our revenue growth.”
Deal’s administration based the state’s $18 billion budget for the current fiscal year on an estimate of 4 percent in revenue growth. If, as now seems might be the case, revenue growth exceeds the 4 percent estimate, Gov. Deal said Friday that he’d set those additional revenues aside to replenish the state’s reserve fund, which has been depleted during the past few years of lagging tax revenue.
“We do not need to go into the future with no reserves to call on in time of need,” he said.
That is just the sort of restrained fiscal course this state should take in the coming months, and as attention begins to turn toward crafting a budget for the 2013 fiscal year, which begins next July 1.
Certainly, if state revenues continue to rise, there will be pressure for the governor and the legislature to loosen the state’s purse strings just a bit.
Thankfully, that’s a temptation Deal clearly is going to resist, and as lawmakers begin preparing for the legislative session convening in January, they’d be well advised to follow the governor’s lead.
As the governor recognizes, there is no guarantee that the good news of recent months will continue unabated.