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Tuesday, August 19, 2008

State budget crisis reminiscent of city woes

And isn't it ironic? A little too ironic, don'cha think?

Earlier this month, Gov. Sonny Perdue announced that state revenues were in the toilet, budget estimates were projecting a $1.6 billion ( yes, that's a "B") shortfall and that he was considering raising most people's property taxes.

click to enlarge sonny.jpg

Hmm. This reminds us of an earlier situation involving a large government entity. We just can't quite put our finger on it…

Oh, yeah – It's Atlanta! Remember when CL broke the news back in January about the city budget crisis and the media shit-storm that followed?

Yes, sir, the fur definitely flew when Mayor Shirley Franklin had to lay off more than 400 city workers, slash department budgets and push for a $40 million hike in property taxes.

You may also recall that the City Council bust a gut avoiding the proposed tax increase, even though it would only have cost the average homeowner about $25 a year.

Now, people beat up on City Hall and criticized poor Shirley for running the city budget into the ditch, but at least her administration caught the problems halfway through the last fiscal year, when there still was time to cut spending and end the year in the black.

Sonny's bean-counters, on the other hand, apparently didn't realize the state budget was in a hole until they had to pull $600 million out of reserves to cover the year-end deficit. (In the state's defense, at least it has reserves.)

Now, looking forward at the FY 2009 budget, which kicked in July 1, all the guv can see is an ocean of red ink spreading out before him. But Perdue's response – to propose a $428 million property tax increase – is certainly an odd one. Especially for a guy who, only last January – in his State of the State address, no less – called for the complete elimination of the state property tax!

That move would've saved homeowners only about $30, while his newest proposal would cost us an extra couple hundred bucks a year.

Specifically, Perdue wants to kill the Homeowner Tax Relief Grant, a Roy Barnes initiative under which the state reimburses cities and counties for a large chunk of local property-tax bills. Sonny has already announced the state will be withholding this money for the time being.

The move has most counties scrambling because they must mail out tax bills within the next few weeks. Do they surprise homeowners by suddenly billing them for this additional amount? Or do they gamble that Perdue's proposal will be defeated and leave the tax bills unchanged – knowing what a bitch it would be to try to collect the money later?

This past weekend, we're told, a number of top GOP lawmakers held meetings at the Capitol with the governor. We don't know what was said, but we can guess. No Republican politician is going to be willing to go along with a major tax hike in an election year. And if Sonny continues to push, there's likely to be a full-scale rebellion.

Hmm. Now, who do you think that would benefit?

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