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House panel OKs $18.9 billion budget

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POSTED: February 25, 2009 12:51 p.m.
ATLANTA - Grappling with the worst deficit in Georgia's history, the House budget-writing panel on Wednesday approved an $18.9 billion spending plan that funnels hundreds of millions of dollars in federal stimulus money into Medicaid and education.

Plummeting state tax collections have ripped a giant hole in the state's revenues. The budget approved on Wednesday by a voice vote in the House Appropriations Committee slashes $2.6 billion in state revenues for the current fiscal year.

The federal stimulus money coming from Washington is helping blunt some of those cuts.

The budget uses about $150 million in federal stimulus dollars to help offset cuts to school districts. It also adds in $465 million in additional Medicaid dollars from Washington. The spending blueprint covers the fiscal year that ends June 30.

The budget provides cash for an additional food safety specialist and three food safety inspectors in response to the salmonella outbreak linked to a South Georgia peanut plant.

House Appropriations Committee Chairman Ben Harbin said he did not think the budget would require additional furloughs of state employees. Almost a quarter of the state's roughly 100,000 employee work force have been forced to take off furlough days without pay to help Georgia cut costs.

The future was less certain.

"This economy is changing so quickly I don't want to build any false hope," Harbin, a Republican from Evans, said.

The budget restores $1.3 million to the state Department of Revenue to keep it from having to furlough auditors. State lawmakers say that with tax revenues plummeting the state needs the auditors more than ever to make sure that Georgians are paying their fair share.

The budget also scrapes together $428 million for the Homeowner Tax Relief Grant. Local government officials had said they would have to send out supplemental tax bills - averaging about $200 to $300 a household - if the state money failed to arrive. Under legislation signed last week by Gov. Sonny Perdue, the grants will be tied in future years to the state's economic performance.

The full House is set consider the budget Thursday. It still must pass the state Senate.

State legislators must then tackle the budget for the fiscal year that begins July 1.

The forecast for that spending plan is grim.

A report from economic forecasters at Georgia State University predicted that the state's financial recovery won't begin until 2011 as stimulus programs and government credit fixes kick in, Rajeev Dhawan, director of the economic forecasting center at Georgia State University.


 

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