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Perdue budget proposal contains more layoffs, furloughs

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POSTED: January 15, 2010 5:54 p.m.

ATLANTA (AP) — Gov. Sonny Perdue on Friday proposed a budget that continues to slash state spending and recommended three more unpaid furlough days for teachers and other state employees over the next six months.

To keep the state in the black, whole programs would be scrapped under the proposal, including a $12 million program to help local school systems improve their teaching programs as well as the $200,000 Vidalia Onion Research Project. Layoffs are sprinkled throughout the budget.

Perdue cut another $1.2 billion from the $18.6 billion spending plan for the current fiscal year. Tax revenues are lagging about 14 percent behind what they had been the year before.

But the governor also sounded an optimistic note Friday, saying he believes the state has hit bottom.

"I believe that we are through the freefall," Perdue said.

About $900 million in cuts for the fiscal year have already been implemented as Perdue in July ordered state agencies to tighten their belts.

The budget contains no tax increase. But it does revive a proposal that would charge hospitals and health insurance plans a 1.6 percent fee on their total revenues. The fee is needed to avoid sharp cuts to the Medicaid program for the state's poorest residents, he said.

Perdue made the same proposal last year and ran headlong into stiff opposition from conservative legislators who'd pledged not to raise taxes or fees to fill the budget gap. Federal stimulus dollars allowed Georgia to avoid the fee last year but that money is set to run dry.

Alan Essig of the nonpartisan Georgia Budget and Policy Institute praised Perdue for not slashing Medicaid. "Cuts of that size could have been devastating," he said.

But the Democrats assailed the plan saying it would boost health care costs for Georgians.

Legislators must approve the spending plans and lawmakers can tinker liberally with the governor's recommendations. But they cannot change the amount of money the state has to spend. Georgia is required by the state constitution to balance its budget.

Perdue laid out two budget proposals on Friday. One covers the fiscal year that ends June 30 and the other the coming fiscal year that gets under way July 1.

Perdue's budget for fiscal year 2011 relies on 4 percent revenue growth and would bring spending back up to $18.2 billion.

"While many believe that may be optimistic, I do not," he said.

Perdue said he won't be asking for any more furlough days in the coming fiscal year. That's in part because the state workforce is shrinking due to attrition, retirements and layoffs.

State officials said the workforce has shrunk by more than 5,000 people since June 2008, dropping from 82,080 to 77,000 at the end of 2009.

The one area of the budget that's seeing a spending boost is mental health, which is under oversight from the U.S. Department of Justice. Perdue is proposing an increase of $70 million for this fiscal year and the next. Federal officials have recently questioned whether the state is doing enough to improve its state psychiatric hospitals.

Funding for schools is suffering but the cuts are not as deep as they are to other agencies thanks in part to another infusion of stimulus funds. Education will see a 3 percent cut overall cut other state agencies are grappling with cuts of between 8 and 9 percent.

Perdue also made good on his promise to provide more bond money for transportation projects. His budget proposal contains about $900 million in borrowing. Of that, $300 million is for road and other transportation projects statewide. Another $68 million in bonds would be used to deepen the Port of Savannah's shipping channel.

"These deep recession times don't mean that you don't have a forward eye and a vision for the future," Perdue said.

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Governor's Office of Planning and Budget: www.opb.state.ga.us

 

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