‘STIMULUS PACKAGE’: Perdue: Let Ga. borrow, build

Athens —- Gov. Sonny Perdue told state lawmakers Tuesday that he will propose an “aggressive” package of borrowing to build schools, libraries, roads and other facilities to help stimulate Georgia’s struggling economy.

Perdue made the announcement during a speech to lawmakers attending a pre-legislative conference on the University of Georgia campus.

“I am going to be aggressive with our bond package to use the good credit and the good name and the good balance sheet of Georgia to do our own stimulus package in Georgia,” Perdue said.

The governor would not say how big the package will be. However, even in good economic years, he’s asked for about $1 billion in borrowing.

President-elect Barack Obama has already said he wants Congress to pass a stimulus package to help pay for infrastructure improvements across the country.

Perdue said he’s not preparing his budget plan —- which will be released in mid-January —- with the idea of getting extra federal funding. However, if the federal government sends stimulus money, Perdue said, the state will have projects ready to go.

The American Association of State Highway and Transportation Officials reported in October that 3,100 projects totalling more than $18 billion could begin within 90 days with federal funding, and listed Georgia as having $397 million of those projects. Georgia Transportation Commissioner Gena Evans said that the state could have $1 billion worth of projects ready to go in 180 days, as long as the federal government could waive some regulatory requirements and spare the state from coming up with matching funds.

The governor’s speech to lawmakers came minutes after the Department of Revenue announced that November tax collections were up slightly compared to the previous November.

Collections rose 1.4 percent in November. However, for the first five months of the fiscal year, they are down 1.3 percent, or about $91 million.

Personal income tax collections increased; however, gross sales taxes dropped 14 percent. Taxes reported for November are largely for sales in October, the first full month of the country’s financial crisis.

Perdue said the numbers for November were better than expected, but he added that they “may not fully reflect the damage from the most recent turmoil. We need to prepare for what’s coming.”

State officials say Georgia is facing a $1.6 billion to $1.8 billion budget shortfall because of declining tax collections. Perdue has told state agencies to prepare for 8 percent spending cuts this year, up from the 6 percent he requested last summer.

The governor told lawmakers the state doesn’t have a strong “cash flow.” But it has a AAA bond rating, the best a state can get. And he said the long-term prospects for Georgia’s economic future are good.

Borrowing money now could help put Georgians back to work and build schools, roads, bridges and other infrastructure the state needs, he said.

“Let’s be about laying the groundwork for our rebound,” Perdue said.

Former Gov. Zell Miller had essentially the same idea in 1992 during the middle of an economic downturn. His Georgia Rebound package included $752 million in bonds to jump-start the economy. However, the economy recovered before many of the projects were built.

Roger Tutterow, a Mercer University economist, said the impact of Perdue’s proposal on the economy would depend on how big it is.

However, he added, “It’s probably a pretty good time to do the bonds and construction projects.”

The building industry has taken a major hit in the economic downtown, Tutterow said, so costs for construction and labor should be low. Also, he said, the state should be able to get a pretty good rate in borrowing money.

Perdue will make his proposal to lawmakers when they convene for the 2009 session Jan. 12. The House and Senate will then likely add projects to the package.

Lawmakers generally support big bond packages because they allow the state to speed up construction of projects in the towns they represent. University System officials presented lawmakers last week with a wish list for the upcoming year that included about $250 million in construction projects.

That list includes $26.6 million for a special collections library at UGA, $19 million for a science building addition at Kennesaw State University and $43 million for an undergraduate commons at Georgia Tech.

Lt. Gov. Casey Cagle, the Senate’s president, said he liked Perdue’s idea.

“There is a time and place when investing in the future makes a lot of sense,” Cagle said.