Tight budget cuts deep into state agencies

Gov. Sonny Perdue has proposed a budget that would likely lead to higher property taxes, as well as a loss of state facilities in small-town Georgia, fewer school nurses and the elimination of hundreds, if not thousands, of jobs.

Displeased lawmakers have signaled their intent to dramatically remake the plan, and their efforts to do so could make for a long, contentious session.

They will have to overcome significant obstacles.

First off, with the economy still slumping, legislators aren’t sure tax collections will meet even the depressed projections Perdue used to justify cutting about $2 billion from this year’s budget.

“We just don’t know where the bottom is,” Senate Appropriations Chairman Jack Hill (R-Reidsville) told colleagues last week.

Then there are the policy problems legislative leaders have with Perdue’s spending plan.

Lawmakers don’t support Perdue’s proposal to do away with a homeowners property tax grant that saves many Georgians $200 to $300 a year. To save the program, they will have to come up with another $428 million in cuts.

They also aren’t keen on the new fee he wants to put on hospitals and insurers to help fund Medicaid. That fee would raise more than $300 million, so if they don’t approve it, they’ve got to come up with that much more to cut.

And then there is the uncertainty about what will ultimately be included in the federal stimulus plan.

One of the few positives lawmakers saw in Perdue’s budget plan for fiscal year 2010, which begins July 1, was his proposal to borrow $1.2 billion for construction and infrastructure projects. Perdue claims it would create 20,000 jobs. Lawmakers will probably push to borrow even more.

“We are going to look for ways to spark the economy,” said House Speaker Pro Tem Mark Burkhalter (R-Johns Creek).

What lawmakers eventually do will affect millions of Georgians. The state helps pay to educate nearly 2 million students and provides health care to 1.5 million Georgians. More than 200,000 Georgians get all or part of their paychecks from the state.

The starting point is the governor’s proposed budget.

Here’s a closer look at the impact it would have on key areas:

Education

Combined, k-12 schools and university system campuses would see more than $350 million in cuts in basic funding this year. Next year, k-12 would have another $275 million in “austerity reductions.” If those cuts are approved, Democrats said public education will have taken $2 billion in “austerity” reductions since 2003.

Perdue’s budget next year would cut out $30 million for school nurses, $12 million in supplements for teachers who earn national board certification and essentially make systems decide if they want to use state aid for graduation coaches.

In addition, teachers won’t get cost-of-living raises from the state. Some, however, will get 3 percent longevity raises.

While lawmakers want to save the homeowner grants to avoid a property tax increase, some local school boards will have to raise property taxes if their state funding is cut.

In addition, falling home values mean current property tax rates won’t raise as much money for schools.

Cherokee County Superintendent Frank Petruzielo said, “What scares me the most is not what happens this year, but what happens next year when the property values go down. It’s really hard to fathom how we’re going to deal with it.”

State School Superintendent Kathy Cox said little about the budget when she spoke to the House and Senate Education Committees the day after Perdue’s budget was released.

However, Jeff Hubbard, president of the Georgia Association of Educators teacher group, said, “We have reached education funding Armageddon.

“How many more punches can public education take before we’re knocked out?”

Health care

Whether it’s called a ”fee” or a ”tax,” Perdue’s 1.6 percent levy on hospital and health insurer revenue has already caused a commotion.

The plan would raise a projected $372 million, enough to fill a hole in health care budgets and provide long-sought funding for a statewide trauma network.

Hospital and health plan groups have voiced opposition and are pushing a higher tax on tobacco as an alternative.

As the session unfolds, the proposed Perdue levy may divide the hospital industry into potential winners and losers. It’s likely to favor hospitals that have trauma services and a high number of Medicaid patients, such as Grady Memorial Hospital and Atlanta Medical Center.

Consumer health advocate Linda Lowe commended Perdue for not cutting services to people on Medicaid and PeachCare, the state’s health insurance program for children.

The budget for mental health was trimmed in several areas, despite heightened awareness of problems across the state. The spending plan for this fiscal year and next contains a combined $15 million in cuts to mental health services for children and adolescents, consumer advocates say.

“It’s an absolute crime that we’re not ready to invest in kids and their futures,” said Ellyn Jeager of the Georgia chapter of Mental Health America. And there was no new money in the budget for the state’s psychiatric hospitals, even though Georgia reached an agreement last week with the U.S. Department of Justice to improve care in those facilities.

Transportation

Perdue’s budget doesn’t give the state Department of Transportation money it had sought to balance its books.

When the DOT board submitted its budget request last fall, it didn’t lay off any current employees. To fill expected funding shortfalls, it made a roster of cuts and asked to slash cherished local road programs.

Perdue’s recommended budget effectively tells the DOT it can’t cut the local road programs as much as it wanted and it isn’t getting extra funding.

DOT Commissioner Gena Evans said the department expects to lose hundreds of employees through attrition. Layoffs are back on the table.

DOT board Vice Chairman Larry Walker said, “I think there’s a little bit of that feeling out there now that everybody else has taken their medicine more than we have. “

The DOT has already made sharp cuts to its budget and road contracting to help close a billion-dollar hole that state auditors said they found.

“The fat, the fluff is out,” said Evans. “When we start cutting this time it’s going to be meat.”

Perdue’s budget also denied DOT’s request for several million dollars for commuter rail.

Public safety

The Department of Corrections, which will lose 10 percent of its budget this year, will close two probation centers as well as four prisons across the state.

Both the Georgia Bureau of Investigation and the Department of Public Safety would take big cuts this year, but neither said they will be laying off any employees. Much of their savings will come from not filling vacant jobs.

Public Safety spokesman Gordy Wright said the agency’s primary mission won’t change.

“Troopers will continue to patrol and respond to traffic crashes,” he said.

The state’s already cash-strapped public defender system would see its budget cut by more than 13 percent.

The biggest hit for the defender council is a large cut in funding for “conflict cases.” Those are cases with multiple defendants that require private lawyers because conflict of interest rules require a state-salaried public defender to represent only one defendant. This year, the council cut bills submitted by private lawyers because there has not been enough money to pay them.

“Any decrease just worsens the already-existing funding crisis,” Wilson DuBose, the public defender council’s chairman, said. “It’s a pretty devastating cut.”

Natural resources

The Department of Natural Resources is absorbing 18 percent cuts this budget year and next by decimating funds used to clean up hazardous waste sites and illegal garbage dumps, delaying repairs and regular maintenance at state parks and hanging on to vehicles close to 200,000 miles.

The department is also eliminating 60 positions or about 2 percent of its work force. Most of the positions —- 47 —- are vacant.

In the budget cycle that starts July 1, DNR also plans to close eight swimming pools in state parks, privatize or close the eight state-run golf courses and close a regional State Historic Sites office.

Staff writers Andy Miller, Laura Diamond, Aaron Sheinin, Ariel Hart, Nancy Badertscher, Bill Rankin and Stacy Shelton contributed to this report.