Gov. Sonny Perdue on Thursday said state revenues for the almost-ended fiscal year have continued to decline and that state agencies will lose a quarter of their June funding.
Perdue, in a letter to top state lawmakers, said he is being forced to lower the state revenue estimate by more than $274 million for the 2009 fiscal year that ends June 30. That is a 1.45 percent drop in the 2009 budget state lawmakers approved earlier this year.
The state's grade schools and high schools won't be affected by the cuts, Perdue spokesman Bert Brantley said. Perdue plans to use federal stimulus money to replace cuts in state funding for k-12 education, as well as for some public safety functions.
This cut comes on top of more than $2 billion in spending reductions for fiscal 2009. Perdue had to make the move to avoid further emptying already depleted state reserves at the end of the fiscal year to pay bills. State revenues have been in a steady decline, with April's tax collections down by more than 20 percent from April 2008, the fifth straight month of year-to-year decreases.
Still, Brantley said as agencies absorb this latest cut it will put them in line with expected 2010 spending. The state budget that begins July 1 is set for $18.59 billion, or about $60 million less than the current budget after these latest cuts. Absorbing the June reductions should help agencies prepare for the 2010 budget, Brantley said.
"Agencies have been preparing to get to that 2010 level," Brantley said. "Revenues were just declining so quickly we knew we probably weren't going to make the '09 revenue estimate. The hope is that with using some stimulus funds to offset cuts to education and public safety programs we have available, the hope is we don't see any major knee-jerk reactions to this."
The current year's budget includes more than $637 million in federal stimulus money. The state had already planned to use $1.13 billion of stimulus funds in the 2011 budget, but Perdue will redirect some of that to fill holes in the last few weeks of 2009. In 2010, the state has $1.45 billion in stimulus money budgeted.
John Millsaps, a spokesman for the University System of Georgia, said Chancellor Erroll B. Davis Jr. had warned college presidents to expect further cuts.
"Things are going to continue to be pretty grim," Millsaps said. "We've asked our presidents, the chancellor said to be prepared for a 1 to 2 percent additional cut. Our presidents have been working hard to put their institutions in that position to be able to do that."
Georgia State University last week laid off 30 employees and eliminated an additional 300 positions.
These latest cuts could prepare agencies for 2010. But what happens if revenue continues to decline into the next fiscal year is another matter. Agencies are already ordering furloughs for more than 30,000 state employees and are cutting services.
The state Department of Natural Resources this week announced further cutbacks at a number of state parks and historic sites and increased admission and parking rates.
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