2010 Georgia Budget Proposal Cuts into Nearly All Departments

By Jonathan Springston
Senior Staff Writer
The Atlanta Progressive News
January 29, 2010

(APN) ATLANTA – Gov. Sonny Perdue kicked off his final budget push by preparing State lawmakers to make painful cutbacks.

The $18.6 billion Fiscal Year 2010 budget contained billions of dollars in cuts, but a 13.7 percent decline in tax revenues mean even more sacrifices.

"We've got to maintain core services for our citizens, but this recession and this economy forces us to do what our constituents are doing with their checkbooks as well," Perdue said.

The governor's amended 2010 budget contains an additional $1.15 billion in cuts across almost every department, resulting in a revised $17.4 billion spending plan for the rest of FY 2010, which ends June 30, 2010.

The cuts include three additional furlough days for all State employees, a move the governor projects will save $125 million.

"Furloughs are not a long-term management solution," he said. "You cannot go to this well year after year."

As promised in his final State of the State address, Perdue included a $19.7 million increase for the Department of Behavioral Health and Developmental Disabilities in the amended 2010 budget.

"We have a moral obligation to care for the most vulnerable of our citizens," Perdue said. "I implore you to make this commitment."

While he expects revenue to remain flat for the rest of FY 2010, Perdue said he does not expect any further declines. The FY 2011 budget assumes 4 percent growth and proposes an $18.2 billion spending plan.

"You have to go back 70 years to find a legislature and a governor in an economic situation we are dealing with now," Perdue said. "The good news is I think we’re through the freefall. I’m hopeful we’ll be able to smooth things out."

Despite the optimism, the fiscal 2011 budget again calls for near universal cuts. It recommends adding $63.7 million to the Department of Behavioral Health and Developmental Disabilities.

The FY 2011 budget calls for nearly $900 million in bond projects, including $168 million in construction, equipment, and school buses for Georgia’s K-12 schools and $300 million in transportation projects.

But there are signs of trouble everywhere. The House and Senate Appropriations Committees listened to department heads last week explain how they are managing in a poor economy.

Georgia's Department of Education will have to make due with $710 million less in state funding through FY 2011, State Superintendent of Schools Kathy Cox said. This could endanger progress made in graduation rates and test scores, Cox said.

"The budget environment we’re in might put all this great progress we’ve seen to a halt," Cox said. "I’m here to say we can’t let that happen."

Democrats are behind a proposal that would shift control of collecting sales taxes from the state to local governments, arguing such a move could generate $1 billion in new revenue.

"This could be a huge revenue source for the State," House Minority Leader DuBose Porter (D-Dublin), a candidate for Governor, said in a statement. "It doesn’t raise taxes on anyone, but still provides the money to fully fund education. It would also prevent furloughs from disrupting Georgia’s schools."

The Georgia Budget and Policy Institute also urged the Governor and legislature to address funding shortfalls with not only cuts, but new revenue sources.

"The governor should be applauded for taking a balanced approach in his budget proposals, especially in the call for new revenues to help avoid crippling cuts to Medicaid," Alan Essig, Executive Director, of GBPI said in a statement.

"As the General Assembly tackles the budgets this session we hope they take as pragmatic of an approach as the governor has begun," Essig said.

"They should assure that the education, healthcare, and public safety infrastructures are available to Georgians, especially to those hard-hit by the recession," Essig said.

Georgia’s Medicaid system faces a $608 million shortfall. To make up the gap, Gov. Perdue proposed instituting a 1.6 percent tax on hospitals' net patient revenue and premium revenue on managed care insurers. The governor estimates this could bring in over $300 million. However, not everyone agreed that this particular new revenue source was a good idea.

The Democratic Party of Georgia labeled it a "sick tax" that would harm hospitals and patients.

"While insurance and hospital costs will rise under Perdue’s budget, the bulk of the new revenue from the 'Sick Tax' will come directly from hospitals that raise the fees on their patients," Jane Kidd, DPG chair, said in a statement.

"At a time of sickness and grief, it is fundamentally unjust to balance the State budget on the backs of Georgia’s most vulnerable citizens."

Last year’s HB 307 offered a similar proposal, but it stalled in Committee after the Georgia Chamber of Commerce and the Georgia Hospital Association expressed strong opposition.

Col. Bill Hitchens, Commissioner of the Georgia Department of Public Safety, said numerous cuts have harmed his department’s ability to protect citizens.

"We’ve fallen short already," Hitchens said. "There are a lot of local agencies taking care of responsibilities that we used to."

The list of issues here is long, from over 300 job vacancies, an aging fleet of patrol cars, the part-time operation of many interstate weigh stations, to the closure of three of the state’s seven regional crime labs on April 01, 2010.

Georgia Department of Transportation Commissioner Vance Smith said his department has lost employees, utilized furloughs, reduced the frequency of grass cutting along state roads, and deferred maintenance on roads and bridges.

"If the money doesn’t come in, where do we cut?" Smith asked. "We don’t really want to cut employees because we’re losing employees every month. It’s going to be really hard to decide where to cut."

In a move likely to please rail advocates, Smith said representatives from 12 states are coming to Georgia later this month to discuss rail planning for the future.

"The governor has pushed on high-speed rail," Smith said. "We’re going to follow that lead and talk to other states about what they’re doing."

Perdue told lawmakers not to duck the hard choices. "We must rise to this challenge to protect our future prosperity."


About the author:
Jonathan Springston is a Senior Staff Writer for The Atlanta Progressive News and is reachable at jonathan@atlantaprogressivenews.com.

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