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Budget daze: Next governor must rebuild state's economy

POSTED: July 11, 2010 12:30 a.m.
As gubernatorial candidates battle for the state's top job, the most important issue remains obvious - money.

A balanced budget could define the success of the candidate that gains office. But there are many needs to consider, including education, transportation, public safety and health care. As state tax revenue remains low, cuts seem the only option.

"It's all driven by state revenue," said Bert Brantley, director of communications for the governor's office. "If the economy turns around and we start to see good news, then the legislature will have an easier time meeting the needs out there. But the big issue facing the next person is meeting higher demands with less funding."

The largest area of the state budget - more than 50 percent - goes to education at all levels. More than $10 billion will fund pre-kindergarten services, public schools, the University System of Georgia and the Technical College System of Georgia.

Schools have been hit hard by austerity cuts imposed since 2003, which represents a total of $4.3 billion cut.

"Education takes up a large percentage of the budget, but that is decreasing," said Steve Dolinger, director of the Georgia Partnership for Excellence in Education, a nonpartisan group that helps educators across Georgia understand current issues. "It's falling on the local community to make further cuts in their budgets and increase their revenue, which means taxes. We realize there are a lot of tough decisions that have to be made just like the local school budget, but it's interesting to hear that all the gubernatorial candidates saying education is a top priority."

Debate over the funding continues.

"If you look at the number, we're spending $1 billion more than the first year Gov. Sonny Perdue took office. It's a confusing debate and always has been the case," Brantley said. "Until the (Quality Basic Education Funding Formula) is changed, it always will be. We tried to change it, but when the economy began to dip, it wasn't possible to change given the reductions in revenue."

The next governor could look at modernizing the system, he said.

Another large chunk of the budget goes to transportation. As the governor commits bond packages to construction projects each year, the major issue is where to focus next. In 2012, voters can decide if the statewide sales tax should be increased by a penny to help with projects in their region.

"There are a lot of moving parts and a lot of questions, including the development of the project list leading up to the vote," Brantley said. "Voters in Gainesville, as a part of the Northeast Georgia region, will be able to decide if they want to build that project list using the extra penny. The question is how much do you commit to transportation, roads and bridges?"

The other main portions of the budget - public safety and health care - are more difficult to cut.

"Public safety includes corrections, the Georgia Bureau of Investigators and the Georgia State Patrol, and we have one of the largest prison populations," Brantley said. "The big question here is you have to keep those who have done wrong locked up, otherwise the only option is to leave them on the street. Corrections, like education, got a smaller cut and continues to be a challenge."

In health care, state funds match federal funds for programs such as Medicaid and Peachcare, which are needs-based insurance programs for residents below the poverty line.

"This has a huge impact if you do cut back because those are insured people who are needy and qualified," Brantley said. "If you cut back on those, you add to the uninsured. When uninsured people wait until a cough becomes the flu, the bills are much more expensive and the corresponding cost occurs on the back end."

The next governor must focus on how state funding for health care will correspond with the new federal health care reform plan.

Although federal funds will cover new enrollees for a few years, the state must pick up a larger portion of the tab in coming years. This also is linked to the end of federal stimulus funding dollars, which will run out next July.

"As it is phased in at the state level over the years, how can we balance the budget with increasing burdens and costs?" Brantley said. "How can we address all the important issues when the population and needs are growing, but the state revenue is not keeping up?"




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