Georgia House To Vote On $1 Billion In Cuts Thursday

By Aaron Gould Sheinin
The Atlanta Journal-Constitution
February 10, 2010 6:05 PM

Blood began to drip from the turnip that is Georgia's budget on Wednesday as House budget writers gave key approval to a revised spending plan for the fiscal year that runs through June 30.

The amended 2010 budget, which will go before the full House Thursday, stands at $17.4 billion, down $1.15 billion from the budget lawmakers and the governor approved just last spring. And the cuts sustained this week are only likely to deepen as legislators begin work on a budget for the fiscal year that begins July 1.

Bad news was spread through the entire 117-page budget.

State employees, including teachers, will continue to see furloughs through the end of the fiscal year and increased costs for health insurance. Nearly every agency also will see 6 percent to 8 percent cuts across the board.

But House budget writers protected a proposal from Gov. Sonny Perdue to boost funding for mental health hospitals by $2.2 million, a system that is under federal scrutiny. Also, no further cuts were made to basic school funding -- beyond the $281 million Perdue already targeted for cuts. Indeed, the House proposal puts $17 million back into a fund for low-wealth school districts, money Perdue had recommended cutting. The so-called equalization grants help certain districts make up for a lagging property tax base. Gwinnett and Clayton are among the metro Atlanta counties that could benefit. Gwinnett had been budgeted to receive more than $26 million from the program.

Perdue and the budget writers in the House were also at odds over how to fund $33 million in tuition grants for students to attend private colleges. Perdue had suggested using HOPE scholarship reserves, but lawmakers were loath to target money that benefits so many of their constituents. Plus, there are concerns that for the first time state lottery revenue will not meet HOPE needs, requiring cuts to book grants or the use of lottery reserves to pay for the program's core scholarships.

"The governor recommended we take that money out of lottery reserves, but we think that's inappropriate," House Appropriations Committee Chairman Ben Harbin (R-Evans) said. "We have put $33 million back into HOPE scholarships, to make sure we meet the needs there."

The governor's office declined to comment on the House plan.

But even as the Appropriations Committee voted 53-5 to approve the spending plan, it was already obsolete. The state budget is written each year based on estimates of how much revenue the state will bring in from taxes and other fees in the months to come. But Georgia is in the midst of a 14-month run of declining revenues -- hence the constant cuts to spending. But the budget adopted in committee Wednesday assumed that January through June of this year would see an end to that decline. It didn't predict growth, but nor did it assume a continued drop in revenue.

Yet, Tuesday afternoon Perdue's office reported that revenues in January fell again, by 8.7 percent over January 2009. That means the budget the House will consider Thursday proposes to spend more money than the state is now expected to bring in.

Ultimately, because Georgia state law requires a balanced budget, lawmakers and the governor will have to revise their work to reflect the further erosion of the tax base. But, Harbin said, for now the governor remains optimistic the economy will rebound.

"We met with him, and he feels like we can manage the rest of the way," Harbin said. "He feels we're going to kind of start balancing out, and if we don't, we have some stimulus and some backfill."

Harbin's proposed budget includes more than $2 billion from the federal stimulus package. If the hole in 2010 deepens, the governor and lawmakers can siphon some stimulus dollars targeted toward 2011 to fill it. Of course, that will only deepen the hole for 2011.

The five votes against the budget plan in committee Wednesday all came from Democrats.

House Minority Leader DuBose Porter (D-Dublin) , who was one of the five, said their main concern is the failure of the budget to fully fund what's known as the midyear adjustment for schools. Twice during the school year, districts can apply for more money if they see a boost in enrollment, since some elements of school funding are based on the number of students enrolled.

The budget proposed by the governor, and seconded in this case by the House committee, includes a 0.67 percent increase to the midyear adjustment for a total of nearly $93 million. But
Porter said that is significantly less than needed and will result either in schools finding more ways to cut education or increases in local property taxes.

"What [Republicans] keep failing to recognize is this is why local systems raise property taxes,"

Porter said. "They are simply passing responsibility to the local communities in those districts."

WHAT IT MEANS TO YOU

Under the plan approved by the House Appropriations Committee:
If you or your child is getting a HOPE scholarship, there's less chance that the benefits will be cut.

If someone in your family is a Medicaid patient on a ventilator, they could be moved from a hospital to a nursing home.

If you're in Clayton County or Gwinnett County, you could see your school district get more state funds, thanks to equalization grants.

http://www.ajc.com/news/georgia-politics-elections/house-to-vote-on-297103.html

© 2010 The Atlanta Journal-Constitution