Experts in agriculture, applied economics and housing pined over the state’s financial progress in front of the members of the Georgia Senate and House appropriation committees Thursday.
Some offered good news while another foresees a dark forecast for the state.
“You look around the state and the economy looks really good with a lot of positives going on,” said Sen. Jack Hill, chairman of Senate Appropriations Committee. “Yet, it is really important to get our hands around where our state’s economy is and where we’re headed.”
Georgia broke records in tourism and film over the past year and has seen job growth in most regions of the state. The state’s current employment rate is below the national level at 3.6 percent, and it has been rated the best state in which to do business.
But two months into the fiscal year, the state already is $97 million under revenue budget, said Hill.
“That’s a pretty sobering thing to me,” he said. “Now that’s not a trend. It’s just two months.”
Economist John McKissick, founder of the Center for Agribusiness and Economic Development, presented an evaluation of the state’s agriculture industry.
Agribusiness produced $14 billion worth of goods for the state between 2016 and 2017, McKissick said. The industry employs workers who operate and coordinate the production of farm goods. Agribusiness also includes food manufacturing. Hand in hand, McKissick said agribusiness contributes about $74 billion per year to the state’s trillion-dollar economy.
“You can’t talk about development particularly in rural areas unless you talk about building on the base of the success of agribusiness and maintaining that success,” he said.
Although agribusiness is healthy in Georgia, tariffs and a shortage of workers have stunted the industry's growth.
The two meetings scheduled for Thursday and Friday are part of Gov. Brian Kemp’s plan to streamline state spending to cut wasteful expenses and reroute money to jobs growth initiatives and for higher teacher pay.
Committee members also heard presentations about workforce development and housing patterns.
State economist Jeffrey Dorfman said Kemp was right to prepare the state for more conservative spending because Georgia may be facing a recession in 2020.
Tax collections in August were 2.8 percent less than the same time in 2018. The state collected $1.7 billion in August. Dorfman predicts the trend may foreshadow the first quarter of 2020.
Tax revenues collections for the first quarter of 2020 could be down by 0.005 percent instead of the 2 percent increase originally expected.
“Even accounting for the tax cut and individual taxes and large reduction state's share of its TATV [Title Ad Valorem Tax ], revenue is falling short of projections," he said.
Dorfman is still working on predictions for 2021.
"I can tell you that I am factoring into my predictions a 50/50 chance of a mild recession during calendar 2020 likely beginning early in the year," he said. "While it is no means certain Georgia will enter a recession, it is a possible scenario."