ATLANTA -- Gov. Nathan Deal’s draft budget for Georgia cuts some $1.7 billion from the bottom line, keeping with predictions of next year’s budget shortfall.

But most state agencies don’t show proportionate cuts. He’s suggesting big changes in schools and Medicaid. Now legislators will have to decide how they would divvy a smaller pie: give everyone some little sliver or boot some away from the table? This week, hearings start, and representatives and senators will begin to try to balance hundreds of competing demands in the fiscal 2012 budget.

Deal, whose wife is a teacher, said funding K-12 education is a top priority next year and called it the state’s No. 1 economic development tool.

And though he pledged to end furloughs, his headline education figures show cuts to education of 7 percent, mostly due to disappearing federal recovery money. A federal grant from August should have paid bills for this school year, by Deal’s calculation. And “local school systems should have been able to set aside local funds to be used in fiscal year 2012.”

Sure enough, that’s what Bibb County public schools did, said schools Chief Financial Officer Ron Collier, who added that most counties did the same.

But there’s still going to be a shortfall that the governor didn’t address, said Alan Essig, executive director of the independent Georgia Budget and Policy Institute. The draft budget correctly assumes there will be more students. It accounts for them but then turns around and cuts what’s technically called QBE formula funding. That roughly translates to the cost of an education per student, and it’s slashed by a total of $60 million.

That and the loss of federal recovery funds indicate that schools will still be pushed back onto local resources in the next school year. And compared with state education’s large budget, most other department expenses are like coins in the couch cushions, meaning legislators won’t find hundreds of millions even if they raid the furniture.

As for the HOPE Scholarship money that pays for in-state university and technical school tuition, Deal wants to stop raiding the rainy-day fund and stick to funding by annual lottery revenue.

But that’s at the same time he proposed a 9 percent cut to the Board of Regents, which some legislators argue will force college tuition rises. And if lottery sales stay stagnant or fall, that gambling income is not likely to match the growing demand on HOPE money.

“The state system has tried to be conscious in raising tuition, not just raise tuition willy-nilly,” said John P. Cole, the general counsel and vice president of institutional advancement at Macon State College. Indeed, tuition at his college has remained roughly steady at about $1,250 per semester for the past four years.

There are a few ways legislators will consider dealing with HOPE. First, the funds could be cut, capped or tied to a higher academic standard, such as an SAT score, an option popular with Republicans. Second, they could pry more money out of the gamblers, by cutting lottery payouts, an option unpopular with the state lottery’s managers.

If HOPE shrinks, opined Cole, “first it might affect student satisfaction, then it cuts choice.” If students are paying more of their own bills, Georgia College & State University in Milledgeville’s $3,900 per semester won’t look as good as Macon. Finally, if HOPE falls too sharply, it “affects if a student goes to school at all.”

For those reasons, he said value for money has got to be a college’s goal if it wants to stay competitive.

Health care: fewer services in midstate?

Medicare pays for health care for about 1.4 million Georgians who are indigent, aged, blind or disabled. About 65 percent of those bills are usually paid out of Washington, which is paying even more this year through special federal grants. But as those run out, Deal has identified two options for funding, or rather, cutting.

He may be looking to remove some people from Medicaid. In remarks he delivered when the budget came out, Deal referred to a letter he and other governors wrote to the federal government urging them to allow states to manage their “unique” Medicaid populations but keep all funding.

Essig thinks that’s a pitch to cut people from the rolls and that it won’t work. It’s a rule that came out of last year’s new health overhaul legislation, and he thinks Washington won’t grant a waiver.

Otherwise, Deal’s budget proposes reducing the reimbursement to doctors, pharmacies and dentists by 1 percent and would cut dental and vision coverage from low-income Medicaid coverage.

Cutting Georgia’s reimbursements “could put hospitals, especially in rural Georgia, out of business,” Essig said, because of the number of rural residents using the program.

Whether through closures or doctors just rejecting Medicaid patients, that would shut indigent patients out of health care, he concluded.

At The Medical Center of Central Georgia in Macon, nearly any Medicaid rate cut would “negatively impact” the bottom line, Chief Financial Office Rhonda Perry said.

She’s in a wait-and-see mode about the budget and will watch hearings this week very carefully.

Trimming jails, parks

Bibb County won’t get any greater funds for housing state prisoners under Deal’s proposal. He’s suggested no change in the $9.6 million appropriation.

And there may be more temporary closures of state pre-release centers that help inmates successfully transition to the outside world through practical work experience -- one is at Macon State Prison near Montezuma.

The Department of Agriculture’s budget is up for cuts of about 2 percent. Deal proposed trimming operation expenses at the Athens and Tifton veterinary labs as well as at the statewide network of Poultry Veterinary Diagnostic Labs.

Out in the wild, hunters and anglers may notice some changes to forest management after cuts.

Parks and wild areas may be “less intensely managed,” said Todd Holbrook, deputy commissioner for operations at the Department of Natural Resources. Especially if his department falls under Deal’s plan to trim the state’s work force by attrition, layoffs or leaving positions unfilled, there will be subtle changes -- maybe fewer feed plots, less equipment replacement, a longer wait for permits and some delayed maintenance.

DNR’s very first priority is to fill its law enforcement role: supporting game wardens, rangers, techs and other staff.

There are no plans to close any facilities, but the state will terminate some private leases of land now used as Wildlife Management Areas. New land acquisitions -- such as Oaky Woods in Houston County -- offset those losses.

“It’s impossible to knock $4.2 million out of our budget and have no impact … maybe the first time, but not now,” Holbrook said.

It’s a sentiment familiar across state agencies, after several years of smaller appropriations.

The state House will respond to Deal with its own draft budget, which should be published by mid-to-late February.

To contact writer Maggie Lee, e-mail mlee@macon.com.