Deal budget puts recession in rear-view mirror, but some face cuts

Georgia legislators received the rosiest financial projections they’ve heard since the Great Recession on Tuesday, with the state’s fiscal economist predicting strong job growth and education officials using words such as “phenomenal” to describe extra money Gov. Nathan Deal wants to put into schools.

The state’s reserves haven’t been this full since 2007, and Deal’s $21.8 billion budget plan would spend more on everything from colleges and ethics policing to economic development and schooling for prison inmates.

The news put lawmakers in a good mood Tuesday as they opened a week of budget hearings, giving them a financial breather after years of massive budget cutbacks during the recession and its aftermath.

But there were also a few hints of thorny issues the General Assembly will debate in coming months.

Among the most prickly to come up Tuesday: a Deal proposal to eliminate state funding to pay for health insurance for about 11,500 “noncertified” school employees, such as bus drivers and cafeteria workers.

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“It is not a good idea,” said state Rep. Bill Werkheiser, R-Glennville.

State Sen. Nan Orrock, D-Atlanta, said, “Unfortunately, those with the least clout and the least ability to stand up for themselves and their families are often the target of budget cuts.”

And then there were issues Deal’s budget may only partially address, such as the University System of Georgia’s concern that pay at top schools such as the University of Georgia is falling far behind salaries at other flagship institutions in states such as Alabama and Florida. System Chancellor Hank Huckaby said full professors, on average, made 26 percent more at the University of Alabama than they did at UGA in 2014. In 2001, he said, UGA’s salaries were ahead of Alabama’s.

Deal included about $11 million in next year’s budget for raises in the system. Huckaby called salary increases the system’s top priority this session. “It is a critical need for us,” he said.

This week’s hearings begin a two-month back-and-forth process that will end with a spending plan for fiscal 2016, which begins July 1.

State spending helps educate about 2 million students and provide health and nursing care for more than 1.8 million Georgians. The state funds road improvements and prisons, economic development initiatives and cancer research, business and environmental regulation, parks and water projects. It creates thousands of private-sector jobs through construction projects.

Deal released his recommendations last week, with more than half of the extra money that the state would spend going to schools.

After years of cutbacks, the state ended the most recent fiscal year with $863 million in its “rainy day” reserves, the largest such figure since the fund was raided to keep the government afloat during the recession.

Ken Heaghney, the state’s fiscal economist, told legislators that Georgia is adding about 8,700 new jobs a month and the state is seeing stronger wage growth than the national average.

“We expect that to continue,” he said. “We tend to grow faster in the good times and we take a bigger hit in the downturn.”

The weak global economy could slow Georgia a bit, but for the most part, Heaghney’s projections for the next year and a half were positive.

“Overall, I think the outlook is strong,” he said.

Education agency officials said Deal’s budget plans should eliminate teacher furloughs in most districts. Furloughs were common for several years as the state forced austerity cuts on districts.

“It’s a great budget,” new Georgia School Superintendent Richard Woods told legislators.

Although the financial news on the state’s public health care programs was better than in past years, Department of Community Health Commissioner Clyde Reese quickly heard from lawmakers about Deal’s proposal to eliminate school bus drivers’ insurance funding.

The workers receive coverage under the State Health Benefit Plan, which covers 630,000 teachers, state employees, retirees and their families.

Reese said because the state heavily subsidizes the insurance, it ran a $135 million deficit funding coverage for “noncertified” school employees such as bus drivers last year. If the problem persists, he said, the entire $3 billion State Health Benefit Plan will be running a shortfall within a few years.

Eliminating the coverage, Reese said, “is something I am sure will be talked about and discussed.”

House Appropriations Chairman Terry England, R-Auburn, responded, “That might have been the understatement of the year.”

Lawmakers are already hearing from school employees in their districts. Werkheiser said many bus drivers only get up early to drive a school bus so they can get the state-subsidized insurance. “I predict if they pass it, 80 to 90 percent of the drivers in rural Georgia won’t drive,” he said.

Orrock said: “They get up at four in the morning to safely transport our children to school. We can do better than this.”

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