Georgia House leader says teacher pay raise, income tax cut may be gone with coronavirus

With Georgia’s economy shrinking because of the coronavirus pandemic, House Speaker David Ralston said Friday that the state may not be able to afford the teacher pay raise the governor wants and the income tax cut House Republicans have advocated.

Ralston said on Georgia Public Broadcasting’s “Political Rewind” Friday that with likely months of declining revenue ahead, the state may simply not have the money for either.

“I used the slogan during the session, ‘Republicans cut taxes,’” said Ralston, R-Blue Ridge. “I am not sure a tax cut in this type of emergency is the wisest course to go.

“I don’t think giving a huge pay increase to one group of state employees is the wisest course to go,” he added. “These two items took up a lot of room in the budget that we may not now have.”

The Atlanta Journal-Constitution reported last week that the state could see a massive drop in revenue as more Georgians are laid off, stores close and economic activity slows. The state gets most of its revenue from income and sales taxes, both of which will likely decline in a major way.

The state is expecting a boost from the federal coronavirus relief package, but it’s unclear how far that will go.

Through the 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, mental health and drug treatment, and it helps fund public health programs that are fighting the pandemic.

It also pays the salaries of more than 200,000 state workers, university system staffers and teachers.

The 2020 General Assembly session is currently suspended because of the pandemic. When lawmakers return, they will have to pass a budget for fiscal 2021, which begins July 1.

The House passed a $28.1 billion budget earlier this month that gave teachers a $1,000 raise - half of what Gov. Brian Kemp proposed. The measure also offered raises to state employees.

Kemp had wanted $2,000 pay raises for teachers. Last year, lawmakers approved a $3,000 teacher pay raise. Had the General Assembly gone along with Kemp this year, it would have allowed him to meet his 2018 campaign pledge to give teachers a $5,000 raise during his term.

However, the $2,000 pay raise would cost the state about $350 million, money Ralston said it now may not have.  The same goes for the proposed state employee raises. The Senate has yet to vote on a 2021 budget.

The House also passed a Ralston-backed cut in the state income tax rate, which would be the second such reduction since 2018. But that would cost $250 million to $380 million, depending on who is doing the estimating.

“Those are both probably going to have to come out now,” Ralston said.

The speaker predicted that when lawmakers come back into session - likely sometime in the next two months - “you are going to see a down-to-earth, bare-bones kind of budget.”

Just as families in Georgia are trying to figure out how to survive during the pandemic, Ralston said, the state must determine “what do we absolutely need as a state government to run the state until we get back in session in January 2021.”