‘Extras’ in a lean budget?

By James Salzer


The Atlanta Journal-Constitution

With teachers being furloughed, health programs being slashed and state government in a fiscal free-fall, Gov. Sonny Perdue’s budget plan includes this $9 million priority:

Finishing a horse show complex expansion at the state fairgrounds and agricenter in his home county.

The governor’s proposed budget also includes $67 million for a rural economic development program that recently gave a $598,000 grant to Houston County, his home, to help prepare for Little League Baseball Inc.’s move to Warner Robins. The plan from Perdue, a University of Georgia-schooled veterinarian, includes $7.7 million to design a new veterinary medical “learning center” at UGA.

And it includes $10 million to help pay for the College Football Hall of Fame in Atlanta.

Perdue staffers say the projects will drive needed economic development, but after months of hand-wringing about the state government’s monumental financial mess, some lawmakers were incredulous.

House Appropriations Chairman Ben Harbin (R-Evans) wouldn’t address any of the specific items included in Perdue’s budget. But he said lawmakers are looking hard at everything as they try to rework next year’s spending plan.

“We’re asking teachers to take furloughs. When we do that, it’s our responsibility to go through the budget and make sure there is nothing frivolous.”

Members of his committee agree.

“How is a horse barn absolutely necessary?” asked Rep. Kathy Ashe (D-Atlanta), a member of the House Appropriations Committee.

When he released his budget proposal last month, Perdue described it as an $18 billion plan that would “maintain core services of government.”

“Just as Georgians are balancing their checkbooks and making tough decisions in difficult times, the state must and will do the same,” he told reporters.

Perdue officials say many of the projects the governor wants to fund are job producers at a time when new jobs are scarce.

“What we are trying to do is look forward and say, ‘what are we going to need not only this year but over the next few years to generate economic activity and handle the growth we see coming,’” said Bert Brantley, his press spokesman.

The proposed expenditures are the kind of add-ons to the state budget that are readily accepted when times are good.

But legislators say this is no ordinary time.

State government is in a historic fiscal retrenchment. The 2011 fiscal year, which begins July 1, will be the third year of massive budget cuts. Lawmakers are talking of blowing up state agencies, of closing technical colleges, of slashing spending to public health programs, prisons and parks. Lawmakers have cut about $3 billion the past few years, and are searching for up to $1.5 billion more.

So it’s hard, they say, to justify some of what Perdue is advocating in his budget.

Many of the items they are questioning are in Perdue’s bond package — borrowing the state does to pay for projects. The state this year will pay about $1 billion in debt service for money it has borrowed. The annual payments on this year’s proposed bond package alone would be about $100 million.

Money budgeted for the horse facility in Perry would pay for the third phase of an expansion that has already cost the state about $17 million. The third phase includes an arena and practice ring and covered walkways throughout the facility.

Michele Treptow, spokeswoman for the fairgrounds, said the new facilities will help attract more and bigger events, increasing rental fees and bringing in visitors from out of state.

Atlanta officials are hoping for much the same economic bang from the College Football Hall of Fame. The state would borrow $10 million to help fund the Hall. The facility could cost an estimated $90 million, with most of the money raised from private sources.

The money for OneGeorgia, the rural economic development program, would come in two parts.

The first involves borrowing $20 million over 20 years to “buy” the Kia training facility at West Point. The state owns the facility, and it trains Kia workers there.

The state built it using money from OneGeorgia. Perdue wants the state to sell the bonds to acquire it from OneGeorgia for the technical college system. It’s essentially a maneuver to pay back a program Perdue supports.

OneGeorgia has been controversial from the start. Rural lawmakers say the program’s grants and loans spur economic development in areas badly in need of help. Others have at times questioned how the money has been spent. For instance, in 2007 the program put $4.6 million into the Columbus expansion of one of Georgia’s most politically connected companies, AFLAC insurance.

OneGeorgia has expanded beyond its rural roots, putting money into remodeling a pricey Augusta hotel and helping pay for machinery for a Boeing Corp. facility in Macon. Honda, AirTran and FedEx have also benefited from OneGeorgia awards.

OneGeorgia’s board is headed by Perdue. He wants to use the Kia training facility money to replenish OneGeorgia’s reserves, which are expected to stand at $52.8 million by the end of this fiscal year.

Few state agencies carry large balances, and OneGeorgia’s reserves are nearly double the amount the separate Department of Economic Development is budgeted to receive next year.

Perdue also wants the General Assembly to approve $47 million in new spending for OneGeorgia. The program went without funding this fiscal year. But, thanks to its reserves, it doled out $8.3 million in awards last December.

Included was $598,000 to help the nonprofit Little League Baseball Inc. in its move to Warner Robins, which is down the road from Perdue’s home. According to a OneGeorgia press release, the move will bring five new jobs to the area.

The UGA vet school proposal surprised some lawmakers because it is one of only a few major construction projects chosen out of a lengthy list of university system priorities. The money would pay for the school’s design. The cost of building it would come later.

But it’s a priority to Perdue.

“He obviously knows the school and knows the need over there,” said Brantley, the governor’s spokesman. “I think it’s something he personally believes in and it also has a high growth potential in terms of students and research dollars.”

Some advocates for other state programs also question the governor’s priorities. They note that his proposed expenditures come at a time when county health departments would be cut, school nurse funding would be reduced, and the Department of Human Resources would lose staffers who help people in need of services like food stamps and Medicaid, the health care program for the poor and disabled.

“In dealing with the budget crisis, Georgia can only go so far with cuts in critical services like health care and education,” said Linda Smith Lowe, a consumer health advocate. “We’ve gone beyond what is prudent.”

While some lawmakers have grumbled about the governor’s budget, they have a long tradition of adding their own local projects to the state budget, no matter the economic situation.

House Rules Chairman Bill Hembree (R-Winston) said he opposes some of the add-ons Perdue proposed, but predicts some will stay. “The justification will be economic development.”

But Harbin said lawmakers have gotten the message: the state can’t afford extras.

“I think you’ll see a much, much different budget document from the House,” Harbin said. “There are just some things we can’t do this time and probably shouldn’t be doing in the future.”