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Perdue slashes budget yet again

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POSTED: March 4, 2009 9:33 a.m.
ATLANTA - Gov. Sonny Perdue said Tuesday he will draw on more than $1 billion in federal stimulus dollars to help the state dig out of a deepening deficit for the coming fiscal year.

Beset by plummeting tax collections, Perdue ordered deep new cuts Tuesday to state spending. But he allowed that the financial picture would have been far worse without the federal dollars coming from Washington.

Even with the stimulus cash, Perdue's blueprint for the fiscal year that begins July 1 calls for the state's roughly 100,000 employees to ante up at least five percent more for health insurance costs starting in January. And he is ordering another $69 million in cuts to state agencies which have already pared back their budgets, some by more than 10 percent.

Hospitals will be hit particularly hard. Facing stiff opposition from members of his own Republican Party, Perdue on Tuesday abandoned plans to charge hospitals and health insurance plans a fee to help pay for soaring Medicaid costs.

Instead, hospitals will be slapped with $186 million in cuts to Medicaid provider fees. The governor also axed $37 million from the state's cash-starved network of trauma hospitals.

The governor's revised spending plan cuts the state's revenue estimate by $1.6 billion from the $20.2 billion that he had previously budgeted for the year.

Perdue also said Tuesday he will accept federal stimulus money for the state's unemployment insurance fund, an issue that had been in doubt after he suggested that accepting the money might tie the state to increased spending down the road.

Perdue said Tuesday that the state would need to shell out about $1 million but would see an infusion of about $150 million in return.

State Labor Commissioner Michael Thurmond said the money will help keep the fund afloat amid soaring unemployment rates in the state.

Among the other federal stimulus dollars, Perdue's budget uses some $527 million in additional Medicaid cash, $427 million for education and $7 million for foster care.

But even as he embraced the stimulus money, Perdue cautioned that it comes at a cost.

"We don't believe this is free money; somebody is going to have to pay this back," Perdue told reporters at the state Capitol.

Perdue said Tuesday he's not optimistic about the state's tax collections picking up anytime soon.

He said the state Department of Revenue has issued 48,000 more tax refund checks in February than it had the year before. That suggests Georgians are filling out their returns quickly.

"They need the money," he said.


 

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