Perdue agrees to back homeowner relief grants

State Republican leaders have railed against the federal stimulus package but the extra money Georgia is receiving will indirectly help save homeowners from getting a supplemental property tax bill later this year.

It will also limit the amount of additional budget cuts state agencies will have to make.

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Gov. Sonny Perdue reversed course Tuesday and signed legislation that promises counties $428 million to pay for the homeowners’ tax relief grants they doled out last fall.

Without the $428 million, counties would have had to send out supplemental tax bills, asking homeowners to repay the $200 to $300 grants.

Perdue signed the bill flanked by Lt. Gov. Casey Cagle, the Senate’s president, and House Speaker Glenn Richardson (R-Hiram).

Perdue said the state can pay for the grants, which he called “ineffective” because the government is assured of getting more than $460 million in Medicaid stimulus money. That will free up previously committed Medicaid money for other state needs, including the homeowners’ grants.

Senate Majority Leader Chip Rogers (R-Woodstock), who has been among the state’s most vocal critics of the federal stimulus plan, praised Perdue for signing the bill.

In a statement to reporters, Rogers argued that the money for the homeowners’ grant is coming from new spending cuts and reserves, not stimulus money.

“While Washington D.C. places almost a trillion dollars in debt on the American people, we in Georgia are delivering real tax relief to homeowners,” Rogers said. “This is good day for homeowners in Georgia.”

Cagle, Richardson and House Democrats also sent out releases praising the governor’s decision.

The stimulus money won’t solve all the state’s budget problems this year, although it will mitigate some of the damage.

Because of the continued recession, Perdue announced Tuesday that he was cutting the revenue estimate — the amount of money the state expects to collect in taxes — by $450 million for the rest of fiscal 2009. Less revenue will mean deeper cuts to education and other services.

Agencies are already facing more than $2 billion in spending cuts.

But because Georgia will receive an infusion of federal stimulus money in the upcoming fiscal year, Perdue said he would use $150 million worth of state reserves this year that had been targeted for fiscal 2010, which begins July 1.

That will reduce the size of the additional spending cuts. So will more than $100 million that Perdue plans to use from state benefits plan reserves.

So in the end, agencies will have to cut another $131 million, rather than $450 million.

The biggest additional hits will come in K-12 education, where Perdue is recommending another $99 million be cut, and the university system, where he wants another $20 million reduction.

Both agencies were already dealing with budget cuts of more than $150 million this year.

Perdue called the stimulus funding “very timely.” He said once state officials have had more time to digest what it will mean to Georgia, he will put out new revenue and budget plans for fiscal 2010 next week.

Some health care advocates and officials raised concerns about using Medicaid money indirectly for things other than health care.

“We believe that 100 percent of the [Medicaid funds] should stay in health care,” said Kevin Bloye, a Georgia Hospital Association vice president. “The Medicaid program has been underfunded for years, and this is a good opportunity to make the system what it should be.”

Georgia’s budget shortfall this year forced state officials to shelve a long-anticipated Medicaid payment increase for hospitals, doctors, nursing homes, dentists and other medical providers.

Members of the General Assembly have also been seeking money for a statewide trauma network.

Consumer health advocate Linda Lowe said that she hoped money would be spent enrolling children who are eligible for Medicaid and PeachCare health insurance but have not yet been signed up. She also pushed for more funding for the mental health system and for family planning services, which have been cut.

— Staff writer Andy Miller contributed to this report