Teachers face more furloughs in Perdue budget proposal

Gov. Sonny Perdue on Friday proposed a pair of slimmed-down state budgets that would raise no taxes but force 250,000 teachers and state employees to take three more days off without pay.

To make up for a state revenue stream that slowed to a trickle over the past 13 months, Perdue was forced to find ways to cut about $1.2 billion from the state budget that took effect July 1. The plan he will present to lawmakers for the final six months of the current fiscal year tops out at $17.4 billion.

The so-called "big budget" for fiscal 2011, which begins July 1, would grow by about $800 million, a sign that Perdue believes the worst of the economic crisis is behind us.

"While many believe that is optimistic, I do not," Perdue said during a news conference in his Capitol office. "Because of the low watermark where we've been historically in these last two years, I'm confident we can make those numbers."

Perdue's budget proposals now go to the General Assembly, where lawmakers traditionally use them as a beginning point for their own spending plans. Lawmakers will not be in session next week as House and Senate budget subcommittees meet to begin that process.

The governor's $18.2 billion budget for 2011 remains an austere plan, one that is nearly $3 billion less than the state was spending just two years ago. That increase, he said, is "not money we'll get to freely spend. It's money we'll be able to utilize to continue meeting those needs."

The budgets, he said, "maintain core services of government."

Also included in the 2011 budget is a plan to float $900 million in bonds for capital projects, including the $300 million for transportation projects that Perdue unveiled Thursday.

Teachers, who were told to take three furlough days just before the start of the current school year, would be required to take three more, as would other state employees, most of whom have already taken at least six days without pay since Jan. 1, 2009. For the second consecutive year, teachers didn't hear anything about pay raises.

In some school districts, county or district surpluses were used to offset teacher furloughs. In Fayette County, a teachers organization is advocating that be the case again, and other counties are likely to try to take a similar path.

Perdue said he built the 2011 budget with no additional furloughs. And while he said he hoped the budgets would prevent state layoffs, some agencies appear to be facing job cuts. The Department of Juvenile Justice, for example, would be required to eliminate more than 40 positions. Others agencies that are listed as having filled positions eliminated under the budget include the departments of Agriculture, Banking, Child Advocate, Emergency Management, Equal Opportunity, Forestry, Revenue and the Secretary of State,

On K-12 education, the overall picture is mixed. For example, in both the 2010 and 2011 budgets, the Department of Education overall would receive more money, largely thanks to federal stimulus funds.

But the basic funding mechanism for schools, the Quality Basic Education funding formula, shows a $450 million reduction for the rest of 2010 and $527 million in cuts for 2011.

Of that $450 million in 2010, about half would come from the teacher furloughs (roughly $30 million per day in savings) and through increased health care costs for teachers, administration and staff, leaving about $218 million in actual classroom cuts.

Nearly all state employees, in fact, would be paying more for health care or already are, as the governor pushed agencies to make cuts the past several months as monthly revenues plunged.

The state Department of Corrections would close a prison in Hardwick, eliminating 694 beds. The state would also eliminate $1.5 million in grants for driver's education programs across the state. Two teacher scholarship programs would be eliminated, as would the stipend received by more than 2,000 teachers who have obtained national board certification.

Perdue's budget continues to fund the museums of Music, Sports and Aviation. All three are in Perdue's home Middle Georgia region.

As expected, there are no tax increases in either budget, but there is at least one new source of revenue, a sort of "bed tax" charged to hospitals and a fee on managed care providers. Together those fees would raise about $345 million and would largely go to fund increased Medicaid costs.

That plan is similar to one Perdue proposed a year ago, but which legislators rejected. House Majority Leader Jerry Keen (R-St. Simons) said Friday that he sees no reason to accept it now.

The plan to add a fee to managed care providers "will affect small businesses only," Keen said. "It will tax small business owners and the hardware stores and the restaurants and stuff like that when there's already a tremendous amount of pressure on health care costs."

Keen said he understands the pressure Perdue is under. "I'm hoping we can find an alternative or more creative way."

Keen, however, was intrigued by Perdue's plan to tap a Georgia Environmental Facilities Authority fund for $288 million through a series of bond market transactions.

"Sounds like a pretty good idea," Keen said. "If he can do that and there's a market for that, it sounds like something I can support."

In terms of state tax revenues, Perdue is estimating that individual income tax collections will increase by about $350 million in 2011 to $7.52 billion and state sales tax collections to grow about $200 million to $5.28 billion. Corporate income taxes would see a modest $5 million increase to $580 million in 2011.

Tobacco and motor fuel taxes would both produce slight declines in revenue, according to Perdue's estimates.