Gov. Sonny Perdue has been criticized in some quarters for not having much of a vision for the state’s future, but his standard response to that criticism has always been that he’s more interested in making sure Georgia becomes the “best managed” state that responds quickly to its “customers” (taxpayers).
Perdue is also a big believer in the deregulation of businesses, arguing that the removal of regulatory shackles is best for all concerned.
Recent developments show that Perdue may be a little off in his judgment.
The state Revenue Department, which processes state income tax returns and issues refunds to taxpayers who overpaid, has fallen hopelessly behind in getting the returns processed this year.
The situation in that agency has gotten so bollixed up, in fact, that some Georgians who are due an income tax refund from the state won’t get their checks until nearly Christmas this year.
The revenue department recently released a tax refund schedule that said the agency will complete the processing of paper returns received before April 10 “within 10-14 weeks.” That puts a refund in the September-October timeframe.
The processing of paper returns received after April 10 will be completed “within 14-20 weeks,” revenue officials said. That would push a refund into the October-November period. The department said there is still a backlog of more than 400,000 tax returns that have yet to be processed.
Excuse me, governor, but that doesn’t sound like a department that is being efficiently managed and is promptly sending tax refunds to “customers” who are legally entitled to receive the money. It sounds more like an understaffed agency that can’t serve its customers because of penny-pinching by the state.
Revenue Commissioner Bart Graham more or less confirmed that analysis, blaming the delays in tax processing and refund checks on budget cuts that forced the department to eliminate 280 positions, which is 18 percent of its workforce. Those terminations included 155 employees involved in processing tax returns.
Uh, governor, one of the principles of good management is to make sure that enough staff and resources are available to handle the flow of work. You appear to have fallen short in heeding this basic managerial rule.
As for deregulation, one of the areas where Perdue (and the Legislature) have cut back is in the area of banking and finance.
In a very incisive article published in the Atlanta Journal-Constitution last Dec. 28, reporter Alan Judd noted:
“A lack of strong enforcement powers, coupled with what critics see as a lack of will, kept the agency from preventing or even alleviating the crisis that hit the state’s banks this year.
Five Georgia banks failed in 2008, one-fifth of the 25 that collapsed across the country this year. Dozens more Georgia banks continue to struggle, posting losses as big borrowers fall further behind on loan payments.
But as the calamity worsened, the banking department mostly watched from the wings, moving in only as a financial institution reached the brink of insolvency.
. . . In 2007, the state banking department says, it received more than 6,000 complaints about financial institutions, and it investigated more than 1,400 written complaints.
The department won’t say, though, which banks were involved. Nor will it disclose details of the complaints or their resolution.
Late this summer, the department stopped accepting complaints. Now it only refers consumers to other government and nonprofit agencies.
Gov. Sonny Perdue ordered spending cuts across state government, but he told department heads to spare “core” programs, said [Commissioner Robert] Braswell, the banking commissioner. In his agency, Braswell defined those as “regulation and supervision of the entities we regulate.”
“One program that was not a core program … was our consumer affairs area,” he said. “So that’s where we chose to make our cuts.”
To sum up: under Perdue’s deregulatory approach, Georgia’s banking regulators have eased back on their oversight of the state’s banks and have stopped accepting all complaints from consumers who try to report a problem with their local banks. Perdue certainly appears to have achieved his goal of deregulation.
I’m sure it’s just a coincidence that during this period of lax regulation, bank failures have skyrocketed in Georgia. Fully 20 percent of the nation’s bank failures have occurred here since the current economic crisis started unfolding last summer, more than in any other state (even California with its housing collapse).
With the collapse last week of the Southern Community Bank of Fayetteville, there have now been seven bank failures in Georgia this year. The situation has gotten so bad that the Wall Street Journal, which is not exactly a bastion of socialist thought, described Georgia as the “Chernobyl” of banking. I don’t think that was intended as a compliment.
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