Georgia agencies told to plan billions in spending cuts due to pandemic

State agencies were told Friday they should plan on cutting more than $3.5 billion from their budgets in the upcoming fiscal year, a move that could bring furloughs and layoffs among Georgia’s 200,000 teachers and state employees.

With the coronavirus pandemic shutdown and recession hitting state finances hard, Gov. Brian Kemp’s budget office and the leaders of the House and Senate budget committees sent a memo to agencies asking them to develop new spending proposals for fiscal 2021, which begins July 1. The amount they should expect to cut: 14%, no exceptions.

That includes K-12 schools, which would see their state support trimmed, and state colleges. For public schools, state spending cuts could bring higher property taxes in Metro Atlanta to make up at least part of the shortfall.

“The actions we have had to take as a state and as a nation to protect the health of our citizens is significantly impacting our economy and our state revenue,” the memo said. “As you know, we have a strict constitutional mandate to create and adopt a balanced budget for our state.

“Due to the rapidly changing revenue picture for FY 2021, at this time we are asking every state agency to prepare for an FY 2021 budget that includes a 14% reduction from their FY 2020 original base.

“While the Great Recession of 2008 was considered to be a ‘once in a lifetime’ event, our current situation will certainly overshadow it. That is why this request is being made to ALL areas of the state budget with no exceptions.”

The memo was sent by House Appropriations Chairman Terry England, R-Auburn, Senate Appropriations Chairman Blake Tillery, R-Vidalia, and Kemp’s budget director Kelly Farr.

The memo also went to all school superintendents.

Budget leaders have said they want to take an aggressive approach to trimming spending with the hopes they won’t have to do more in January.

State tax collections could be down $2 billion by the end of the current fiscal year, which finishes June 30, and some projections say the lasting economic slowdown will cut revenue by more than $3 billion in fiscal 2021.

The General Assembly suspended its session in March due to the pandemic without passing a 2021 budget. Even if it had, lawmakers would have to rewrite it now.

Lawmakers are expected to start working on the new budget in May and return June 11 to pass a spending plan.

By then the state will have more up-to-date numbers on the financial damage done by the pandemic shutdown and recession that could be long-lasting.

This isn’t the first time in the past 12 months that state agencies had to offer up budget cuts.

Kemp ordered state agencies in August to develop plans to cut their budgets by 4% this year and 6% in fiscal 2021. He gave them about a month to come up with those proposals.

More than 1,000 vacant jobs were eliminated.

However the biggest, most expensive parts of state government were exempt: Basic K12 schools funding, universities, Medicaid and the road-building agency.

This time around, with the money the state will need to save, those areas won’t be spared.

Through Georgia's state's budget, taxpayers help educate 2 million children, provide health care to more than 2 million Georgians, build roads and bridges, manage parks, investigate crimes and incarcerate criminals, and regulate insurance firms and utilities, along with dozens of professions. The state issues driver's licenses and helps pay for nursing home care for the elderly.

The state is a major provider of basic medical coverage and treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the pandemic.

Besides paying salaries, it also helps make sure that hundreds of thousands of ex-teachers, university staffers and state employees receive pensions and health care.

Craig Harper, executive director of the Professional Association of Georgia Educators, the state’s largest teacher group, said, “We know the hard economic reality of this unprecedented situation will impact public education and educators. Schools and educators meet critical and essential needs of children and families in every community.

“PAGE encourages legislators at state and federal levels to do everything possible to ensure that doors are open for a full school year with the staff, resources, and safety measures necessary to fulfill this vital function.”

Veteran Cobb County educator John Palmer, spokesman for the teacher and state employee group TRAGIC, said schools went through tough times during the Great Recession, when staff was furloughed or laid off, programs were cut, class sizes increased and, in some districts, children went to school fewer days.

“A 14% cut to education would mean another $1.3 Billion taken from Georgia children's education next year alone,” Palmer said.

“Georgia educators and school boards have spent the past 15 years finding ways to do more with less, our children deserve an investment in their education, not even more cuts,” he said. “Educators know this crisis will require sacrifice, but we do not need to once again balance our budget on the backs of Georgia teachers and children.”

Danny Kanso, a budget analyst for the Georgia Budget & Policy Institute think tank, said spending cuts without any attempt to increase state revenue “means accelerating a massive economic downturn, severely underfunding schools, and negatively affecting the lives of millions of Georgians in every community across the state.”

His left-leaning group has advocated raising the state’s cigarette taxes - among the lowest in the country - and cutting back on billions of dollars worth of special interest tax breaks lawmakers have approved over the years.

It has also lent its voice to state and local groups across the country backing a federal aid package for state governments, which have spent billions of dollars fighting the pandemic.

Kyle Wingfield, president of the conservative Georgia Public Policy Foundation, said raising taxes would be a bad idea.

“Georgians are losing their jobs, burning through their savings, and worrying that they will lose the businesses they’ve poured themselves into," he said. "Any new tax burden will mean there’s less money for them to spend on necessities for their families, or for employers to spend on rehiring workers or increasing their hours.

"With so much still unknown about revenues, federal relief and how badly our economy has been battered, it’s premature at the very least to be talking about tax increases."

State Rep. Scott Holcomb, D-Atlanta, a member of the House  Appropriations Committee, said, “Cuts at these levels will be devastating and key services won’t be provided.

“It would be gravely wrong for this to happen if wasteful tax credits and subsidies are spared. Everything must be in the mix.”