Gov. Brian Kemp, left, told the state’s budget writers on Tuesday that Georgia’s economy is ready to grow. “I am optimistic that the strong economic foundation we have built together will continue to support our robust recovery,” the governor said. (ALYSSA POINTER / [email protected])
By James Salzer
That could take “many, many months” according to public health director
Georgia’s fiscal economist told lawmakers Tuesday that the state’s labor market has recovered about as well as it can until the COVID-19 pandemic is over and that the economy should surge this year because consumers have money to spend.
Jeffrey Dorfman, who is also a University of Georgia economist, gave budget writers a fairly rosy view of what the state’s economy will look like as they begin reviewing Gov. Brian Kemp’s $27.2 billion proposal that spends more on schools and health care.
States across the country expected massive shortfalls because of the recession caused by the COVID-19 pandemic, but tax collections in Georgia have gone up rather than down, in large part because of massive federal spending on the unemployed and businesses.
Dorfman told lawmakers that the state was down 123,000 jobs in November from November 2019, but most of those are part-time positions held by, for instance, students or parents, some of whom had to spend more time at home with children because of the pandemic.
“Really, our labor market is about as fully recovered as it can be until the pandemic is over,” he said.
With the huge infusion of federal money — whether supplemental unemployment benefits, direct payments or spending on health care and keeping businesses open — income was up last year for many Georgians.
“We have never had a recession before when people had more money to spend,” he said.
So Georgia has seen a sizable boost in sales tax collections, one of two main taxes that pay for state spending on education, health care and other areas.
Many who received the federal aid saved it, he said. Savings rates went from about 7% to 8% of income before the pandemic to 12% to 13% now. Credit scores have improved and credit card debt has declined, he said.
When Georgians are vaccinated, Dorfman said, “our economic recovery should be quite strong and swift because we will have the money to spend.”
The economist told lawmakers he doesn’t expect widespread evictions or foreclosures if moratoriums are lifted and that business owners “in Georgia have done a tremendous job of finding ways to continue to carry on business during the pandemic.”
Kemp, who asked lawmakers last week to backfill more than $1.2 billion in school cuts made last year and borrow $1 billion for construction, also told budget writers Georgia’s economy is ready to grow.
“I am optimistic that the strong economic foundation we have built together will continue to support our robust recovery,” the governor said.
Long term, Dorfman said Georgia’s population growth has slowed from the boom years of the 1980s and 1990s, so labor force and job growth may not be as robust this decade.
Short term, getting Georgians vaccinated against COVID-19 is the key, and Department of Public Health Commissioner Kathleen Toomey said that will take “many, many months” at the rate the state is currently receiving the vaccine from the federal government.
“We don’t know week to week what the allocation (of the vaccine) will be,” she said.
She is hoping that situation will improve with the new administration taking over the White House on Wednesday.
Read the original story on AJC.com.
