Perdue holding cash until officials adjust budgets

Columbus ledger enquirer:

The term “mega millions” now more accurately describes Georgia’s revenue shortfall than its lottery jackpot.

When the Georgia General Assembly reconvenes Monday in Atlanta, state legislators are going to have to decide how to reconcile income and expenses — again, just like they did last year.

The big question this year is: Just how far short will the revenue fall?

“I think the total number will probably be about a billion four, a billion five,” said Sen. Seth Harp of Columbus.

That would be about $1.5 billion out of a fiscal year 2010 budget that was $18.6 billion when Gov. Sonny Perdue signed it in May 2009. That budget already was tighter than the previous year’s, which began at $21.1 billion.

On Friday, state Rep. Calvin Smyre of Columbus said the latest figure he heard for the shortfall year-to-date was $1.1 billion, and through December, revenue was down 13.7 percent compared to last year.

Perdue already is holding cash until state leaders adjust this fiscal year’s budget through their mid-year supplemental budget, Harp said.

“Sonny has impounded $900 million, so you’re probably looking at another half a billion dollars in impoundment,” the senator said. “He holds the money back, and then what will happen is, we will have to do the supplemental budget, and we will decrease the supplemental budget proportionately, meaning when we come in, we’re probably going to have to reduce the supplemental budget by a billion and a half, somewhere in that neighborhood.”

The governor traditionally delivers his state of the state address on the Wednesday after the assembly convenes, and legislators should get the governor’s proposed supplemental budget and his budget for fiscal year 2011 after that, Harp said. Like the Columbus city government, the state starts its fiscal year on July 1.

Once the governor releases his budget proposals, state legislators go to work, moving it through committees in the House and Senate and typically settling differences in a House-Senate conference committee before the budget’s approved by each body and sent to Perdue for his signature.

Through the 2009 calendar year, state agencies cut back as an eroding economy caused monthly revenue figures consistently to fall short of the previous year’s. Educators and other state workers took unpaid leave to save money.

Now state leaders face the difficult challenge of deciding what’s left to cut.

“You have to be concerned about the fact that there is no more fat in the budget, based on all the cuts that have already had to be done. All the discretionary things that agencies could really do without have already been offered up as cuts,” said Rep. Carolyn Hugley of Columbus. “So now we get into making hard choices about limiting services that people really need here in our state.”

She said she’s concerned about setting priorities as further cuts become necessary. “Up until now we have done kind of an across-the-board method to cutting. That way did not allow us really to make decisions about priorities.”

Posted via email from Jim Nichols for GA State House