Adding
to the area’s troubles are the many of failing banks in Georgia. Six
failed in the state in the past 12 months. Numerous others have
cease-and-desist orders issued against them by the FDIC. This is why
Georgians should pay close attention to the Treasury’s plan for solving
the banking issue.
In addition, the state continues to see an increase in foreclosures and a decline in tax revenue.
The
finances of state and local governments are taking a big hit with the
double whammy of falling retail sales and property tax collections,
which has led to layoff announcements from municipal entities and
school boards. Unfortunately, the portion of the stimulus plan directed
toward bolstering state finances will temper but not eliminate this
decline. The trouble is even more severe at city and county government
levels because property tax revenues will decline sharply in the coming
years. The stimulus plan offers nothing to alleviate the declining
revenue situation.
Net-net, the prognosis for Georgia’s growth
in the coming 12 to 18 months is bleak. The recovery will begin in 2011
as stimulus programs and credit repairs undertaken by the government
kick in. But it will be somewhat tepid as credit market operations
continue to remain well below their highs.
Office of Communications and Marketing
Robinson College of Business
Atlanta, Georgia 30303
Tel: 404-413-7080; Fax: 404-413-7076; E-mail: Communications
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