It's a shame Gov. Sonny Perdue's penchant for prayer doesn't work as well for deficits as it did for drought. If that were the case, Georgia would literally be swimming in greenbacks.
With revenues plummeting in an economic landscape akin to Mad Max, the state is currently facing a $2 billion shortfall, the deepest hole anyone at the Gold Dome says they've ever seen. In response last week, Perdue delivered a cost-cutting whack, slashing nearly all state agencies and programs – many of which state Democrats say help the most vulnerable of Georgians in this most precarious of times.
The Department of Labor, the state agency that's been the first stop for pink-slipped residents? Nearly 13 percent cut. The Public Defender Standards Council, the arm of government that provides indigent defense attorneys in an attempt to ensure justice for both defendant and victims? Almost 11 percent cut. The departments of Education, Community Health and Human Resources? Cut, cut, and cut. State employees' salaries? Frozen – and vacant positions eliminated.
Add to that the $350 million slashed from K-12 educational funding, and you're left with a budget that has little wiggle room. From lobbyists to lawmakers, behind-the-scenes staffers to Gold Dome shoeshine men, everyone we queried agrees: The 2009 legislative session will be about money, and what little of it the state has.
Or, as Perdue said in his state of the state address: "While we have worked for six years to do more with less, at some point, in business or in government, it becomes less with less."
State Democrats have jumped on the offensive and say Perdue's blueprint of a down-on-her-luck Georgia puts the state's most vulnerable populations at risk and only adds to what one financial expert says is a pattern of myopic budget-setting. Such strategies will only hurt the Peach State in the long run, they say.
Even some Republicans disagree with Perdue's game plan – particularly when it comes to fees that would boost medical care programs and property tax increases that would eliminate subsidies for local government.
Included in the governor's budget proposal is a fee on hospitals and health care providers – which opponents have branded a "sick tax" – that will help fund the state's woeful trauma program and avoid cuts to Medicaid and PeachCare. The governor also wants to dip into the state's $1.2 billion "rainy day" reserve fund. He seeks $50 million this year and $408 million in 2010.
Perdue also has stolen a page from President Barack Obama's playbook. He's proposing a $1.2 billion stimulus plan that would build schools, technical colleges and other educational institutions. Perdue says the projects will create 20,000 construction and support jobs and provide a shot in the arm for the economy.
What'll be most painful to homeownersis the elimination of a Perdue-despised homeowners' tax credit that, if approved, means you'll no longer receive an average $200 to $300 discount on your tax bill. Statewide, the tax credit saves homeowners – and costs the state – $428 million.
Lawmakers of both parties are less than enthralled with Perdue's proposals. For the remainder of the 40-day session, the General Assembly will face the difficult choice of cutting other programs and agencies to fund what the governor sliced –as well as some pet projects of their own, it being their habit.
House Minority Leader DuBose Porter of Dublin called Perdue's elimination of the homeowner tax credit the largest proposed property tax increase in the state's history and said the governor was only thinking short-term.
Porter complains that Perdue didn't propose any measures that would raise revenues or do away with exemptions other than the property tax credit.
"He's not willing to look at anything enhancement-wise or deferral-wise," Porter, the House's highest-ranking Democrat, says. "And if you take all that off the table, all you have is cuts and shifting things to local government."
Alan Essig, executive director of the Georgia Budget and Policy Institute, commends Perdue for working under considerable financial constraints – "It's as good a budget you can get with the circumstances we're in," he says – but believes the state's leadership needs to think long-term and be honest about its inability to fund key programs and agencies.
Essig says Georgia, which has one of the lowest tax burdens in the nation, is in a "structural deficit." For the past 10 years, the Gold Dome's addiction to cutting taxes while doling out incentives to businesses cost the state an estimated $1.5 billion annually.
Contrary to what most GOP power-hitters say, Georgia has a revenue problem, Essig says, not a spending problem, and the decades-old habit of bending over backward in terms of tax credits, incentives and exemptions has left the state no better off.
Senate Minority Leader Robert Brown of Macon agrees with Essig. He compares Perdue's budget and the state leadership's lack of vision to "rearranging the deck chairs on the Titanic." He says it's a politically endearing move that's only helped "erode public education, health care funding and veterans' care."
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