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Perdue slashes budget estimates by $310 million

POSTED: March 22, 2008 5:00 a.m.

Facing sagging state revenues, Gov. Sonny Perdue has begun slashing millions of dollars from state spending proposals for the current and upcoming fiscal years.

"As we see the economic clouds gathering over the nation, I think we can expect these will not miss our state," Perdue said at a Capitol news conference.

Perdue announced that state revenues in February were up 0.5 percent. In January, revenues fell by 7.1 percent. Revenues for the fiscal year that ends June 30 are up a meager 1.9 percent.

Perdue said months of sluggish tax collections mean the state may not bring in enough money to meet its budget for the current fiscal year. Instead of dipping into a $1.5 billion reserve fund, Perdue wants Georgia to tighten its belt in case even tougher economic times are ahead.

Perdue has the sole authority under the state constitution to adjust revenue estimates, meaning lawmakers cannot spend more than the ceiling he sets. On Monday, he said he would trim $65 million for the current fiscal year and another $245 million for the year that begins July 1.

He said he’s asking agencies to hire only necessary positions and to curtail discretionary spending, like travel. A Perdue spokesman said that restriction would not affect Perdue’s upcoming six-day trip to China to open a new trade office there. The state is picking up the travel tab costs for Georgia officials.

In a letter to House and Senate budget writers, Perdue outlined his ideas for cutting the budget. In the current fiscal year, the governor is proposing eliminating funds for 557 new school buses, which would save $25 million. Perdue also proposed eliminating one-time equipment and technology upgrades, saving $40.8 million.

For the budget beginning July 1, Perdue has proposed that teachers and state employees be given a 2 percent, rather than a 2.5 percent raise, which would save the state $46.1 million.

Perdue reduced the revenue estimate by $245 million. The original fiscal year 2009 recommendation was $21.425 billion. The equivalent reduction in spending recommended by Perdue would be derived from programs across state agencies.

"All of these programs are worthy of funding and provide good value to the citizens, but we have to make difficult decisions on how to spend our limited resources," Perdue said.

State Rep. Carl Rogers, R-Gainesville, a vice-chairman of the House Appropriations Committee, said he was briefed on the fiscal situation on Monday.

"I thought the governor’s revenue estimate at the beginning of the year was a little optimistic," Rogers said. "I think some of the softness we’re seeing in the economy means revenues are going to be down."

Rogers said that state spending must be realistic.

"We’re meeting tomorrow to readjust the ’08 amended budget and the ’09 budget," he said. "I just wish he (Perdue) had been a little more realistic earlier."

Mike Moye, president of Lanier Technical College, said he was disappointed, but understands the governor’s announcement.

"Our faculty and staff work very hard and deserve whatever raise our General Assembly can afford," Moye said. "But we are grateful for any raise, because we have seen years when we didn’t get anything."

One of Perdue’s new proposals calls for funding major repairs and renovations through bonds, rather than using cash funds. Moye said there are urgent needs at the college’s campuses in Cumming and Oakwood.

"At Oakwood, we’re going to have to replace an entire roof, and at the Forsyth campus, we have to redo the heating pipe system, and that’s going to be expensive."

While Perdue can set the revenue estimates, legislative appropriators will have a large say in how cuts are implemented.

Lt. Gov. Casey Cagle said in a statement that he agreed with the move to reduce spending.

"It is always our goal to lead in a fiscally responsible manner," Cagle said.

House Republicans had pledged to restore austerity cuts to the formula funding for schools in the coming fiscal year worth about $141 million. Perdue had pushed through those cuts and seemed cool to the idea of restoring the money. The new revenue numbers may take away the ability of the House to restore that money this election year.

The grim economic news comes as the legislature heads into the home stretch of its 40-day session.

"The new revenue estimate comes at a late date," said Rep. Doug Collins, R-Gainesville. "We have to present a balanced budget, and the governor sets the revenue estimate. We’re going to have to hold down some of priorities we were talking about in the 2009 budget because we’re dealing with $245 million less."

Revenue collections for February totaled $965,846,000 compared to $961,225,000 for February 2007, an increase of $4,621,000.

The Associated Press contributed to this report.



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