ATLANTA -- If Congress doesn’t take action on its budget by Friday, the picture of what federal cuts will do to Georgia will start to slowly become clear.
“The unknown is driving us crazy,” said House Majority Leader Larry O’Neal, R-Bonaire.
Some 37,000 Department of Defense civilian employees in Georgia would face furlough days, reducing gross pay by about $190 million this year, according to a White House report issued over the weekend. Air Force operations in the state would be cut by $5 million. The package of federal budget cuts known as sequestration would cost schools nearly $50 million statewide.
The federal government is supposed to contribute some $11 billion to Georgia’s total $40 billion budget for the year ending this June, a ratio similar to last year. The feds match state dollars or send grants for programs such as road building, Medicaid and schools.
“Come March 1, the world is not going to come to an end. Things will happen over time,” said Alan Essig, executive director of the Georgia Budget and Policy Institute.
But, he added, sequestration is just one of three federal budget crises in the next two months that have the potential for a negative impact on Georgia’s economy.
The sequestration date is set to be followed by a federal budget continuing resolution -- to authorize basic spending in lieu of an approved budget -- and a debate on raising the national debt ceiling.
“We’re sort of in a waiting game,” said Kelly McCutchen, president of the free market-oriented Georgia Public Policy Foundation.
“The direct impact on Georgia immediately is on personnel around our (military) bases,” he said, and on defense companies like Lockheed.
Such military cuts are so unpopular among politicians of both parties, he said, that it’s possible Congress will let sequestration happen but then make some small fixes.
“I think one of the fixes you’ll see is the military,” McCutchen said.
Nobody knows the entire price tag of sequestration, and even the White House report is a partial assessment, Essig said. Every federal department will manage its cuts differently, so the fallout is hard to foresee.
“I am waiting on some number from the (Board of) Regents to get a clearer picture of what this may mean for our research institutions and efforts,” said state Sen. Cecil Staton, R-Macon, chairman of the Senate Appropriations Higher Education Subcommittee. “It is not totally clear whether the schools will have ways to keep programs running in the short run pending additional congressional action.”
In the next few weeks, Georgia is set to adopt the pair of budgets that will carry it through June 2014, then retire for the year.
“We have to go ahead with Georgia’s business,” writing a budget on schedule, O’Neal said.
But depending on what develops in Washington, Georgia’s state legislators could reappear in Atlanta to amend their own spending.
