It took a few last-minute deals, but the Georgia House of Representatives approved a $17.8 billion spending plan Thursday for the upcoming fiscal year.

The state’s budget will now be taken up by the Senate as lawmakers reach the final days of this legislative session.

State representatives say they expect that senators will soon pass a similar spending plan with only minor differences.

“I would hope the differences would be kept small so we can get out and get back to our lives and families and businesses and start working on our own economy,” said Rep. Doug Collins, R-Gainesville, who is secretary of the Appropriations Committee.

After hours of debate Wednesday, state representatives voted 120-52 to approve the spending plan, which includes tax breaks for wealthy senior citizens and property owners and completely eliminates funding for sports and music halls of fame in Macon and the Georgia Council for the Arts.

Democrats railed against the proposed budget’s cuts to education and the addition of a hospital tax.

“Robbing Peter to pay Paul is not fiscal conservatism,” Rep. Al Williams, R-Midway, said during Wednesday’s debate of the budget.
Yet Rep. James Mills, R-Chestnut Mountain, chided those who spoke against the bill without offering other suggestions. Mills is a member of the Appropriations Committee, which prepared the budget proposal.

“If you‘ve not offered an amendment or you’ve not offered a substitute budget, then it’s easy to sit back there and throw rocks,” Mills said.

The plan also eliminates the Office of Homeland Security in the governor’s office.

Gladys Wyant, executive director of the Arts Council in Gainesville, said the cuts, if approved by the Senate, could make Georgia the only state without an arts council.

But she said the cuts won’t have a dramatic effect on her organization’s day-to-day operations. As it is, funding from the Georgia Arts Council had dwindled in recent years to about $9,000, which helped pay for one full-time position.

But other, smaller programs that receive funding through the Grassroots Arts Program will see an immediate effect. The program is funded by the Georgia Arts Council and is disseminated as grants to organizations throughout the state.

Wyant said arts groups such as the Barrow County Theater and Jackson County’s library, for example, provide arts programming that is paid for by the Grassroots Arts Program.

The Arts Council recently brought jazz artist Lynne Arrialle to Cherokee County for a concert, Wyant said, paid for with funds from the Grassroots Arts Program.

“They never would have had that program if it weren’t for the grant,” she said.

The total loss of the Georgia Arts Council, she said, might negatively affect economic development since businesses often look for thriving arts programs when they look to start up in an area, or to relocate.

“The last three years they have cut the budget for the state arts council by 79 percent,” Wyant said. “We would be the only state in the country without a state arts council.”

But the plan passed by the House Wednesday will most certainly affect local educators’ day-to-day operations.

The House budget plan would also mean no more free PSAT or Advanced Placement tests for Georgia’s students and remove the requirement for first- and second-graders to take standardized tests.

Before the vote, Rep. Kathy Ashe, D-Atlanta, asked state representatives to consider the effect the budget cuts would have on local school systems. She said the cuts would most certainly mean more furloughs, bigger class sizes and higher property tax rates.

“All things we know are not good for our schools and for our students,” Ashe said. “... We are falling far short of what we need to be doing for the students of Georgia,” she said.

House Minority Leader DuBose Porter called the budget proposal “more than irresponsible,” and “harmful to every working Georgian.” Porter urged other representatives not to vote for it. He said the cuts have not filled the budget hole appropriately, but have instead put the burden on local governments, working seniors and sick people.

He said the proposed budget was unbalanced and subject to legal challenge.

“I don’t care if you put sunglasses on it, a wig and an overcoat; you can’t disguise it as anything but a tax increase on those most vulnerable — the sick,” Porter said.

Raising fees, cutting taxes

Before they passed the budget Wednesday, the House approved a massive bill raising dozens of fees intended to help close the gap between the state’s revenues and its spending demands.

The bill also included a plan to phase out a state tax on senior citizens retirement income and would eliminate the state portion of property taxes.

The tax cuts would phase in over five years and gave GOP legislators cover to vote for dozens of fee hikes and a new tax on hospitals.

The House passed the bill 107-63. The state Senate followed suit an hour later with a 39-12 vote.

The fee bill now moves to Gov. Sonny Perdue for his signature. The Republican governor has already signaled his support.

Perdue has pushed both tax cuts in past years without success. Together, they’ll mean the loss of $387 million in revenue when they are fully phased in by 2016.

Lawmakers have been struggling to close a $785 million budget gap for the fiscal year that begins July 1. Fifteen months of plunging tax collections have forced state officials to take an ax to the budget.

Budget writers were counting on the revenue from the hospital tax and the fee hikes to help close that hole. But in the Senate, the plan to slap a new tax on hospital revenues ran into trouble, especially with GOP lawmakers who had signed pledges not to raise taxes.

The impasse had thrown the brakes on the state budget and tossed this year’s session into extra innings.

The deal Republican leaders rammed through on Wednesday salvages a tenuous budget agreement as the clock ticks down on the 40-day session.

The property tax cut approved would eliminate the quarter-mill of property tax revenue that goes to the state. Perdue’s office said savings would amount to roughly $31.50 a household.

The bill also means senior citizens would see the state tax on their retirement income phased out over five years. Seniors already have the first $35,000 in passive retirement income exempt from state income taxes. The change would apply to those who have even more in their investment and retirement accounts.

Seniors still in the work force earning wages would not see a tax break under the plan.

Collins said the tax break was targeted at retirees whose second homes are in Georgia with the hopes that they would spend more time and money in the state, thus stimulating the state’s economy.

“What we’re encouraging is for them to come and live and stay in Georgia and spend their income and living expenses in Georgia,” Collins said. “It’s capturing folks to come and make residence here in Georgia.”

Caught off guard by the tax cut proposals, Democrats protested Wednesday that it was illegal to lump the tax and fee measures together. But House Speaker David Ralston ruled against the minority party and pushed the measure through.

Senate Majority Leader Chip Rogers said the deal prevented a budget meltdown.

“We may have been looking at a special session,” the Republican from Woodstock said.

After the budget passed Wednesday, Rep. Bobby Franklin, R-Marietta, offered an amendment that would further cut spending by privatizing the Department of Human Services.

Franklin called his proposal a privatization of “state charity,” and said churches and charitable organizations would be “knocking themselves over to pick up the slack,” left by the state if it eliminated funding for services such as the Department of Family and Children Services.

The amendment failed with only four votes in its favor.

Rep. Carl Rogers could not be reached by press time Wednesday.

Times reporter Kristen Morales and the Associated Press contributed to this report.