Fulton schools cut 1,000 jobs. MARTA may jettison half its bus routes. Georgia is $500 million in the hole for 2011. The bad budget news has only intensified in March, forcing the question: How will this unprecedented downturn affect the shape of government in years to come?
A budget isn’t just a plan to spend money. It’s an expression of values. Your personal budget reflects the things most important to you. A county government budget states the values of a community. A federal budget is a spare narrative on our national character.
All of those budgets — from the one you’re working on in the kitchen to the one they’re hollering about in Washington — have come under extraordinary pressure in 2010. The recession, that dead reptile whose toxins live on in the unemployment rate and the housing market, has deeply infected the state budget and now is fouling local governments.
To use an Atlanta metaphor, the recession may technically be over, but we’ll be a long time moving the wreckage off the road.
Experts say those lean years will finally dissipate to reveal a new reality: Local government will have been right-sized or wrong-sized, depending on your perspective, but it will be smaller. And our assumptions about it and our expectations of it will be altered, too.
“In most past recessions you have that one year of pain and then you can put things back together. This is going to be very different. We are fundamentally resizing government,” Alan Essig, a former state budget analyst who heads the Georgia Budget and Policy Institute, told The Atlanta Journal-Constitution. “If we’re not going to increase revenue some sizable amount, all these budget cuts are permanent.”
If you can think of a service provided by local or state government, chances are good that you’ll be able to find either a reduction in that service or an increase in what you pay for it, or both. Even at the federal level, with its trillion-dollar deficits, the U.S. Postal Service is proposing a massive cut this spring: a discontinuation of Saturday mail delivery for the first time since daily mail began running in this country. Local and state governments will be delivering their own cuts:
● From higher education to kindergarten, there will be fewer people standing in front of the classroom and more people sitting at the desks (or on the floor).
● Tuition at Georgia colleges will almost certainly go up, with potentially serious consequences for the HOPE scholarship program and the students who depend on it.
● In a state that has long struggled with educational quality, the school year will grow shorter in many districts. Teacher pay will be cut. More furlough days are coming.
● Band and orchestra programs in Fulton County elementary schools have been cut, along with 59 jobs in those programs. The school superintendent has recommended they be converted into a fee-based after-school program.
● Gwinnett County, once the nation’s fastest-growing county, has cut 68 jobs from its planning department.
● Cobb and DeKalb counties are offering large-scale employee buyouts — inviting workers to leave before having to cut some of them loose.
Conservatives have longed for a shrunken government for decades. Now a nonpartisan recession appears to have done the job for them. The economy is creating governments that will be leaner not because someone wants them to be but simply because they have to be.
Many Georgians think there’s good news in that.
“This clearly is a right-sizing of state government,” said Lt. Gov. Casey Cagle, a Republican. “There will be significant cuts that will force efficiencies within state agencies. That is a very positive thing. There are many services we have gotten into over the years that can be eliminated.”
As a professor of public administration and urban studies at Georgia State University, Katherine Willoughby is an expert in the ways that cities, counties and states pay for what they do. Her prescription: Start making choices.
“I think we expect everything,” she said in an interview with the AJC. “We expect wonderful, superior health care, clean streets, beautiful water, protection, wonderful schools, comprehensive support, you know, day care, a good job. People have high expectations, and it’s very expensive to do all that stuff.
“Now we’ve had the come to Jesus meeting,” she said. “We’ve got to sit down at the table and have a real honest discussion.”
Those discussions are taking place across the full spectrum of public agencies and services. To assess the way they are likely to change in the next few years, the AJC analyzed several specific areas of government.
Higher ed: More cost, less HOPE
David Bachman, a junior at the University of West Georgia, is sort of like the University System of Georgia: His expenses are going up; his revenue, not so much. Bachman says he and his mom are looking for more places to cut so school will remain affordable.
“It’s not like I’m going to let myself drop out, but at the same time, I don’t really know how much more I can cut to find the extra money,” he said. “At least I’m close to being done.”
Gov. Sonny Perdue has recommended slicing about $378 million from higher ed in 2011.
Tuition will go up.
But so will enrollment, even as budgets are shrinking. Classes will be larger because colleges can’t afford to hire more professors, and fewer students will graduate in four years because courses they need are already full of other students.
The State Board of Regents won’t set tuition until after the Legislature finalizes the budget, but double-digit increases are in the works in other states. Florida, for example, is considering a 15 percent increase.
Whatever the increase here, Georgia students with a B average or better will depend on the HOPE scholarship to offset it. But HOPE is not immune to the recession, either.
Under law, when HOPE’s reserves dip below a certain level, the program’s benefits are automatically cut. A tuition increase will only accelerate that process. Assuming tuition increases of 10 percent this fall and next, the Georgia Student Finance Commission says, students will begin to see a reduction in HOPE as soon as July 1, 2011. Book-fee awards will drop from $300 to $150 then and disappear in fall 2012. In fall 2013, HOPE will no longer cover some student fees, which can reach as high as $1,300 a year.
The state: Getting the size right
The state budget for fiscal 2009, approved in spring 2008, was $21 billion. The budget for fiscal 2010 has just been lowered again to $17.4 billion.
Even with those extraordinary reductions, the state still had to use billions in federal stimulus money to shore up its finances this year. That cushion will be much smaller next year and will disappear in 2012. In fact, Perdue has already pulled $342 million in stimulus money out of 2011’s budget to plug holes in 2010’s.
With county school systems absorbing deep cuts from the state, and with property tax revenue either flat or declining, many property owners in Georgia may see tax increases from their local school boards. School systems’ tax rates are capped in Georgia, but most of the state’s 180 school districts have not yet hit that cap; some may reach for it this year.
The AJC asked House Appropriations Committee Chairman Ben Harbin (R-Evans) whether Georgians’ lives will change because of the budget cuts.
“I hope not. I hope we are still delivering those core missions,” Harbin said, referring to education, health care and public safety. “They may see some changes on some peripheral stuff we maybe shouldn’t have been doing, but our goal is to try to help school systems. I would like to do this with as little damage as we can.”
“I don’t know we will grow back to where we were before the recession. I think when we start coming back, we will be focused on our core missions, and we won’t start growing programs and add statues to peanuts and stuff like that.”
He was referring to a 20-foot peanut statue on I-75 in Turner County designated as “the official state peanut monument.”
Counties: Buyouts by the hundreds
Cobb County Finance Director Brad Bowers says the county’s early retirement incentive program is the key to controlling the county’s budget crunch. He’s doing his part: Among the 197 people opting for the deal so far is Bowers himself, who’s checking out after 28 years.
“It’s the biggest thing we’re doing to impact the 2011 budget and beyond,” Bowers said.
DeKalb officials are saying the same thing. County commissioners estimate that 580 people will take buyouts (the pension board says it’ll be closer to 400).
That won’t be DeKalb’s only cut, however. Employees will not be paid for the remaining seven holidays of 2010, including July 4th, Thanksgiving and Christmas. There will be no raises in 2010, and staff will no longer be able to take county vehicles home.
Gwinnett leaders believe they solved their budget problems through 2014 by imposing austerity measures in 2009: wiping out 68 positions in the planning and development office, including 30 layoffs, plus 37 layoffs in other departments; an increase in the property tax rate; early retirement for 219 people; an increase in employees’ cost for health insurance.
“We feel like the cuts that we made in 2009, including the millage rate increase, will carry us through the five-year financial plan,” said Aaron Bovos, Gwinnett’s chief financial officer. “We went through the pain last year.”
DeKalb’s finance director, Michael Bell, says the buyout plan will save millions, but it’s uncertain what will happen when the County Commission meets to set the millage on June 8.
“We would hope that we would not have to have a millage rate increase, but who knows?” Bell said.
MARTA: Bus-ted
Douglas Watts rides the MARTA bus up and down the same road in Atlanta most days, often jumping off to minister to people on the streets. Some have drug and alcohol problems. Nearly all worry about finding or keeping a job, he said.
Because of an enormous budget deficit, MARTA wants to drop the No. 1 bus route, which runs down Marietta Street into the heart of downtown. The bus Watts rides so he can minister to the dispossessed and the disaffected may soon be discontinued.
“There’s this hopelessness that a lot of people have, the job situation, the economy,” Watts said last week. “The situation with MARTA is just going to exacerbate the situation. That’s going to create even more of an atmosphere of hopelessness.”
The agency’s deficit is now $120 million, and MARTA has redefined the word “late” when it comes to buses — from “not on time” to “dead.” In a plan that would eliminate 25 percent to 30 percent of its service, MARTA proposes to drop 66 of its 131 bus routes and increase rush-hour train intervals.
In 10 years, the agency expects its current deficit to increase by an order of magnitude — to more than $1.2 billion.
Meanwhile, Watts has adapted. He says his ministry is now based largely on the Internet. If his flock can’t find him on the No. 1 bus, it can reach him at douglaswattsministries.org.
Next: Where will we land?
Thomas Lauth, dean of the School of Public and International Affairs at the University of Georgia, notes that with the economy in seeming free fall, Georgians will be struggling to find what he calls “revenue-expenditure equilibrium” — that sweet spot between acceptable taxes and satisfactory services.
“It is very likely that in the short term following recovery the revenue-expenditure equilibrium will be at a ‘new normal,’” Lauth wrote in an e-mail to the AJC, suggesting that many Georgians may find that “new normal” unacceptable.
GSU budgeting expert Willoughby is confident Georgians will find the right place.
“To me, you just kind of have to have your back against the wall before you’re going to start moving forward,” Willoughby said. “I don’t want to say I’m glad, but it has taken this for people to understand just what government does — the breadth of it, what’s possible.”
Staff writers James Salzer, Laura Diamond, Mary Lou Pickel and Gracie Bonds Staples contributed to this article.
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