04/20/2020 - Atlanta, Georgia - Georgia Gov. Brian Kemp makes remarks during a press conference at Liberty Plaza, across the street from the Georgia State Capitol building in Atlanta, Monday, April 20, 2020. During the presser, Gov. Kemp revealed that he planned to allow some small business owners to open back up by the end of the week. Other business would open up the following Monday. However, Georgia private and public K-12 schools, colleges and universities would remain closed for the remainder of the 2019-2020 school year. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
Photo: Alyssa Pointer/ALYSSA.POINTER@AJC.COM
Photo: Alyssa Pointer/ALYSSA.POINTER@AJC.COM

Kemp: Georgia tax collections - and spending -  will drop 11% in coming year

Gov. Brian Kemp told state agencies Wednesday that he is  projecting an 11% drop in state tax collections in the upcoming fiscal year due to the coronavirus recession.

That will likely be seen as good news.

Kemp’s projection means lawmakers will have about $2.6 billion less to spend in fiscal 2021 - which begins July 1 - when they reconvene this month to pass a budget. 

That’s less of a cut than originally anticipated.

“Tough decisions will need to be made in your agencies and under the Gold Dome to balance the budget without compromising our values,” the governor told agency leaders in a video message Wednesday. “This is a challenging moment but one we are prepared to overcome.”

The leaders of the House and Senate budget committees and the Office of Planning and Budget sent letters to state agencies May 1 requesting plans to cut spending 14% — or more than $3.3 billion — in the upcoming fiscal year because of the coronavirus recession.

A report on state tax collections for April that came out a few days later showed why. They were down $1 billion from April 2019 as businesses shut down and unemployment hit record levels.

Under budget plans submitted last month, more than 1,000 filled jobs would be eliminated and tens of thousands of state employees would be furloughed.

Some state agencies - like the Georgia Bureau of Investigation, the state patrol, public defenders, and others have planned for having employees take nearly five weeks off without pay. Judges - whose staffers would be heavily furloughed - have warned of an avalanche of cases once courts open up again. 

Georgia schools have planned for a $1.5 billion drop in funding, a major loss in revenue for the state’s 180 local k-12 systems.

A group called the Coalition For Supporting Georgia's Vulnerable Children and Families has collected thousands of signatures on a petition against cutbacks to disability programs.

"I have three special needs children who have severe disabilities who get family support funding," said Katie McKoy of Moreland. "This is going to be debilitating for my family.

"There are families who are going to be homeless or have to put their kids in nursing homes because of this."

While better than earlier predictions, Kemp’s projections still mean massive budget cuts when lawmakers reconvene June 15.

But with healthy state reserves and a tradition of conservative state budgeting, Kemp said that Georgia won’t have to make the “draconian cuts” other states face.

“While near-term state revenue collections are uncertain, we are seeing reassuring signs of fiscal resilience in our state,” he said.

Reaction to Kemp’s announcement showed there is still plenty of concern over how deep the spending cuts will go.

"An 11% cut is still too much to ask of GA's students," tweeted Claire Suggs senior legislative policy analyst for the Professional Association of Georgia Educators, the state's largest teacher group. "GA lawmakers need to pursue sensible and strategic revenue enhancements like increasing the cigarette tax."

Georgia has among the lowest tobacco taxes in the country and increasing them to the national average, according to estimates, would raise about $575 million a year.

But House Speaker David Ralston, R-Blue Ridge, said he doesn't think there will be a lot of support from the majority Republicans to raise any taxes. He noted that the General Assembly didn't raise taxes during the Great Recession, the last time lawmakers had to make substantial spending cuts.

"An economic recession is not the time to ask the people to give the state more money," Ralston said. "I think there is a model for coming back that does not involve a tax increase."

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