Lt. Gov Casey Cagle said Wednesday that local governments and homeowners were promised the $428 million tax relief grant, and he wants to honor the promise.

Meanwhile, Gov. Sonny Perdue says he’d like to continue to fund the grants. But he told state lawmakers he just can’t find the cash.

Perdue made the remarks Wednesday as legislators kicked off three days of hearings into the state budget. Georgia is trying to slash about $2 billion in spending to fill a revenue shortfall.

Perdue’s budget blueprint eliminates $428 million in funding for the homeowner grants. That’s been met with protest from state lawmakers, as well as Cagle.

The state pays the grants to local governments, which are then supposed to pass them along to homeowners as tax credits. They average about $200 to $300 per household. Their loss could mean homeowners could see their property taxes rise and some cities and counties might have to send a second tax bill.

"It is my desire and intent to try and work out a strategy so we can honor the commitment on the homeowner grants," Cagle told The Times during a visit Wednesday to Gainesville State College.

Perdue’s comments on Wednesday saying he would give the grants if he could is in stark contrast to his comments in August, when the grants were withheld.

"I would tell every citizen to go back and look at their tax bill on like-minded property from 2000 or 2001 and then look at what it was this last year," Perdue told The Times in August. "It’s pretty clear that some counties are bigger abusers than others. There are some counties that have grown overall by 100 to 200 percent. The growth of local governments compared to state government is phenomenal."

In his August visit to Gainesville, Perdue said local governments were too big.

"They blame and say we’re going to pass them (tax losses) right on to our citizens, and you’re causing their tax increase," he said at the time. "I’ve got the facts to prove the state didn’t cause their tax increase. Those are decisions made at the local level. If they want to blame me, I’ll challenge any of them to a public hall meeting in their own community and show them the facts."

Cagle also differs with the governor over funds for school nurses.

Schools could lose the $30 million the state spends on school nurses each year, a cut that means already cash-strapped districts would have to find money elsewhere or be forced to lay off nurses.

"There are a number of children who have conditions like childhood diabetes and need to have an insulin shot. In those cases, school nurses are very important," Cagle said. He said nurses also help with the increasing number of special needs students.

State legislators grappling with the largest budget hole in Georgia’s history heard a bleak assessment from Georgia’s fiscal economist Kenneth Heaghney, who said Georgia could begin to see a weak fiscal recovery in the second half of 2009. But that recovery could be delayed by an increase in oil prices or some other unforeseen jolt to the economy.

Heaghney said a federal stimulus plan Congress is working on in Washington could provide a huge boost to Georgia’s budget.

Georgia could receive more than $11 billion over the next two years for infrastructure improvements, Medicaid and other expenses.

Perdue has not relied on any federal stimulus money in balancing the state’s budget, saying it would be irresponsible to count on it until Congress acts.