Ga. Lawmakers To Tackle $1B Budget Hole During Hiatus

By TRAVIS FAIN
The Macon Telegraph
News-Local and State
February 19,2010


ATLANTA — With Georgia’s budget picture bleak and looking bleaker, top leaders in the House and Senate announced a two-week hiatus in the ongoing legislative session Thursday to give budget writers time to overhaul the state budget.

Rank-and-file members of the Georgia General Assembly will spend the next two weeks back home. But high-ranking members and members of the House and Senate appropriations committees will be at the Capitol looking for a billion dollars, give or take a few hundred million.

Much of that is likely to come in deep cuts to an already sliced-up state budget as legislators try to avoid tax increases. But some sort of tax increase suddenly seems possible despite its unpopularity among the Republican majority here.

“(There is) a very strong preference to see if this can be done without additional revenues,” Speaker of the House David Ralston said Thursday. “But, hey, at the end of the day, we’ve got to balance the budget.”

Legislators were thrown for a loop by the state’s revenue collections last month. Many had expected the state’s January numbers to be relatively flat compared to the year before — a sign that the economy and tax revenues were recovering.

Instead, they were down nearly 9 percent. That cast more doubt on Gov. Sonny Perdue’s prediction that state revenues will grow about 4 percent in fiscal 2011, which starts July 1.

That was once thought optimistic. Now, many legislators see it as downright unlikely.

But that revenue growth is key to the governor’s 2011 budget. So is an unpopular new tax on hospital revenues and a plan to sell off loans held by the state to generate quick cash. Legislators would like to reject both of these proposals but don’t know whether they’ll be able to find enough cuts to balance the budget without them.

In the meantime, Democrats and some Republicans are calling for a range of small tax increases to get the state through the economic downturn. Increasing the state’s cigarette tax has been a relatively popular idea.

There also are pushes to improve sales tax collections and audit all of the little sales tax exemptions that individual businesses have had written into the code over the years.

Ralston has said repeatedly that there’s just not enough support in the House for any kind of tax increase to balance the budget. But he and other leaders either don’t know where they’re going to find major new cuts, or they aren’t saying.

And Ralston, the Blue Ridge Republican in his first year as speaker, seemed to soften just a bit on the tax issue Thursday as he and others called the state’s budget problems “nearly unprecedented.”

The next two weeks of high-level talks likely will tell the tale, and state leaders are hoping for some good news early next month when tax collections for February are tallied.

The governor’s fiscal 2011 budget includes $18.2 billion in expected state revenues. But some $345 million of that would come from a new 1.6 percent tax on hospital revenues and a similar tax on managed care providers. Another $300 million or so in the governor’s budget would come from selling some of the loans the state has made to local governments to fund water and sewer projects. Neither plan is popular, though the hospital tax seems to have much more vocal opposition than the plan to sell loans.

There also are questions about how much federal money will be available to help prop up the state’s Medicaid budget.

Add in concerns that the governor’s 2011 budget is built on a faulty prediction of revenue growth, and legislators will be looking for $1 billion before they can balance the budget and go home for the year.

Some feel the hole may be even deeper than that. Senate Majority Leader Chip Rogers said Thursday that $1 billion “may be on the low side.”

House Appropriations Chairman Ben Harbin said he and other budget writers “have some plans” on how to deal with all this. But Harbin wouldn’t elaborate much Thursday, and other House and Senate leaders said they were content to let Appropriations Committee members dig through the budget for the next two weeks.

“There will be, at some point, a package ... presented to lawmakers,” Rogers said.

To that end, the House and Senate appropriations committees will take the unusual step of meeting together on the 2011 budget starting Monday.

Harbin said the two groups, which are often at odds, will “put this budget together, together.”

Ralston and Lt. Gov. Casey Cagle, who heads the Senate, issued a rare joint statement on the situation, saying “the reality we face this budget year is nearly unprecedented.”

They promised close cooperation between the two bodies.

Most other legislative business at the Capitol will grind to a halt until there’s a major breakthrough on the budget, and Ralston essentially told members Thursday that they should stay home the next two weeks unless they’re involved in the budget process or a handful of other crucial issues.

To contact writer Travis Fain, call 361-2702 or e-mail him at tfain@macon.com

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