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Lawmakers give scoop on state budget woes

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POSTED: June 7, 2010 12:39 p.m.
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State Rep. Ron Stephens

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The last two years have not been easy for lawmakers when it comes to balancing budget, and it’s only likely to be more difficult in the years ahead.
That was the message May 27 from state General Assembly delegates Sen. Buddy Carter, R-Pooler, and Rep. Ron Stephens, R-Savannah, who were guest speakers at the Richmond Hill Lions Club’s regular meeting. Both Carter and Stephens represent parts of Liberty County.
Both lawmakers focused their talks on the state budget and spoke of the economic downturn, dwindling tax revenues and cuts to services.
Carter called the most recent gathering of legislators “brutal.”
“It was really a tough session,” he said. “Tough in the sense that you’re trying to balance the budget, and we have to balance the budget.”
Lawmakers use revenue figures from the current year to help estimate what revenues might be like for the next budget year. But waiting for the current year’s figures was one of the primary reasons the legislative session was longer than usual, Carter said.
“We only had one month out of the last, I think, 14 months where we had a slight increase (in revenues),” he said. “Every other month has been down from the previous months.”
The current budget is about $17.4 billion, which sounds like a lot of money, the lawmaker said. “But [not] when you think about where we were only two years ago. We had a budget of about $41.2 billion,” Carter said. “So you can see how much we had to adjust our budget in order to meet revenue. Because when revenue is down, then of course we have to match it and get our expenditures down.”
He said the state budget is funded through three primary sources: income tax, corporate tax and sales tax — all of which are dependent on the state of the economy.
And because state budgets traditionally lag behind in real-time economics, he said, it can take a while for states to realize financial downturns or improvements.
“When this downturn started, it actually took us a few months before we really started feeling it at the state level,” Carter said. “Well the reverse holds true, as well. And that is when the economy does pick up — and it will pick up — it’s going to be a few months before we feel that effect at the state level.”
Carter said the 2011 budget, which Gov. Sonny Perdue has until Tuesday to sign, is around $17.7 billion.
But the 2012 budget will be even more difficult, the lawmaker said, due in part to federal stimulus dollars that will no longer be available.
“In fact, in the 2011 budget we used about $1 billion of stimulus funds,” he said. “That’s no longer going to be there, and it’s going to be very hard to replace that.”
Another difficult piece of the 2012 budget puzzle will be the lack of what Carter referred to as “low-hanging fruit.”
“Those programs that weren’t easy but easier than other programs to cut — they’ve been cut,” he said. “We’ve
made all the easy cuts.”
And when about 80 percent of the budget is made up of employee costs — be it salaries or benefits, any future cuts will certainly be difficult, he said.
Both Carter and Stephens lauded the fact that education makes up almost 59 percent of the state’s budget.
But Stephens noted that while Georgia’s population has grown from 9 million to 10 million people in past five years, the state’s budget for the past 15 months was cut by $3.2 billion.
“Somehow we made education the largest percentage it’s ever been in this state,” he said. “That’s saying a mouthful.”
Stephens said lawmakers were able to balance the budget without increasing taxes on state residents and without cutting into areas like mental health, where cuts to providers would hurt the service, he said.
But they had to eliminate more than 7,000 jobs, he said.
“And that’s what you’re supposed to do. When the state has a downturn ... you have to cut,” Stephens said. “Your choices are to cut services or people — that’s not much of a choice.
“Next year’s budget is going to be about $2.5 billion worse than it was this year. So we’ve still got some work to do next year.”
 

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