WEEKLY LEGISLATIVE REPORT - January 16, 2009
Governor proposes budget cuts, tax increases
The 2009 session of the Georgia General Assembly got under way Jan. 12 as lawmakers returned to Atlanta knowing that our No. 1 challenge is to balance the new state budget in the toughest economic conditions we have faced in any of our lifetimes. On the third day of the session, Gov. Perdue laid out budget proposals that indicate Georgians are in for more tough times in the months ahead.
The governor has responded to a $2.2 billion revenue shortfall in the current fiscal year with a 10 percent cut in state spending between now and June 30, followed by a "slimmed-down," $20.2 billion annual budget for fiscal year 2010. The proposals feature significant reductions in state services, $1.2 billion in new state borrowing, use of more than one third of the state's reserve fund and higher taxes for many Georgians.
Under the governor's plan, teachers and other state employees would go without a pay increase. Also, funding for school nurses and supplements to teachers who receive national board certification would be eliminated.
Basic state funding for public schools would be cut by $185.8 million this year and $197 million in FY 2010, shifting those costs to local property taxpayers and bringing the eight-year total of education tax shifts under this administration to more than $2 billion. Property owners would suffer a further tax increase if legislators approve the governor's plan to eliminate $428 million in tax relief grants to local governments.
The governor is also proposing a new 1.6 percent provider tax on hospitals and HMOs to help fund Medicaid reimbursements - a tax that would inevitably be borne by patients.
Other proposed cuts in the governor's budget include $176 million for basic instruction funding at Georgia's colleges and universities, the closing of four state prisons and the elimination of funding for state golf courses and eight state swimming pools at Georgia parks.
The proposed bond package - 20 percent higher than the $1 billion in annual added debt in recent years - is mostly for construction of new schools, college buildings and other facilities. The governor also wants to spend $50 million this year and $408 million next year from the state's reserve fund, which currently amounts to $1.2 billion.
The first week of the new session was devoted largely to organizational matters. House Democrats showed a bipartisan spirit, joining our Republican colleagues in re-electing Speaker Glenn Richardson by acclamation.
The first legislative proposals were introduced and assigned to various committees for consideration before they are debated by the full House of Representatives. This session, I will serve on the House Education, Economic Development & Tourism, Governmental Affairs and Industrial Relations committees.
