State Revenue Collections: Leaky Bucket

Savannah Morning News
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January 28, 2010

GEORGIA REVENUE officials recently reported that they collected nearly $87 million in state sales last month, which was almost 6 percent less than what they collected in December 2008.

Here's what they didn't say:

How much money they left on the table because of inefficiencies in collection at the point of sales. The total is apparently huge.

According to at least one candidate who wants to be Georgia's next governor, the state Department of Revenue fails to collect a whopping $1 billion in sales taxes annually.

If that's true, then Georgia is losing out on about $83 million each month - about one out of every two dollars that should be legitimately collected. That's outrageous at any time. But during tough times, it's totally unacceptable.

If Revenue Commissioner Bart Graham doesn't stop going to the well with a leaky bucket, which is contributing to big cuts in public services and programs, then Gov. Sonny Perdue and the Georgia Legislature must come up with Plan B - finding a new bucket hauler, or finding better buckets.

It's Economics 101.

In the real world, any private business operating at a 50 percent failure rate would be out of business in short order. But in the world of government work, life seems to go on - and the public pays the price.

A recent article in the Gainesville Times newspaper illustrates what's happening in one Georgia county.

Reporters compared local and state records to see if businesses in Hall County were slipping through the cracks and not remitting sales taxes to the state. They found 957 businesses that were not on the state Revenue Department's sales tax list. That's a large number. If a mid-sized county like Hall has this problem, there's a good chance that Chatham and larger Georgia counties have bigger ones.

Linking local and state data bases would seem like an easy fix. So would letting local governments collect the taxes, which is what State Rep. DuBose Porter, D-Dublin, a candidate for governor, has proposed. It makes sense. Local people know who's open for business. Put them in charge.

Or farm it out. Let local governments hire private companies to audit, or possibly collect, sales taxes. Don't leave it up to Atlanta.

In fairness to Mr. Graham, his department has been whacked by budget cuts, which means fewer employees.

He's also in the political cross-hairs. His agency has identified state lawmakers who haven't paid state income taxes. He also refused to have his arm twisted when Lt. Gov. Casey Cagle set up a meeting last year with the commissioner and U.S. Rep. Nathan Deal, another gubernatorial candidate, over a business dispute.

He's an unpopular guy. Yet the buck - all $1 billion of them that went uncollected- rests with him. Fifty-percent inefficiency, or being half good enough, isn't enough.

http://savannahnow.com/opinion/2010-01-28/state-revenue-collections-leaky-bucket

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