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Perdue outlines budget plan in annual address

Gov. Sonny Perdue called on legislators to look past the current economic downturn this morning as he proposed hefty budget cuts and new bond spending that he said will create 20,000 new jobs in the construction industry.

He also proposed major changes to the way the state funds Medicaid, including a new fee for hospitals and insurance companies, and a re-organization of the Georgia Department of Human Resources.

In his annual state-of-the-state address to a joint session of the General Assembly, Perdue rolled out two budgets: His amended fiscal 2009 budget, that takes into account more up-to-date enrollment numbers in state schools, as well as the downturn in state revenues; and the fiscal 2010 budget, which takes effect July 1.

The amended budget Perdue cut by $2.2 billion from the budget state leaders approved last year.

The fiscal 2010 budget will also be less than the original fiscal 2009 spending plan, totaling $20.2 billion in state spending.

Those figures include large dips into the state's rainy day fund, which Perdue said the state has built to $1.2 billion. He proposed taking $400 million of that to help fund the 2010 budget and an additional $237 million to prop up the 2009 budget, despite the heavy cuts.

Perdue also proposed new borrowing to fund state construction projects. He put $1.2 billion in bond funding in his budget, perhaps less than some had expected when he promised an "aggressive" bond package late last year.

But Perdue said it's about 20 percent more bond spending than in recent years, and he said some projects could be sped up to create jobs sooner, rather than later. He said the package includes building at state universities, libraries, a harbor deepening for the port of Savannah and projects "in every corner of our state."

Though more money may be coming through federal stimulus spending, Perdue said he did not include any in his budget, because it's not guaranteed.

Perdue also discussed his plans to increase salaries for the state's best teachers and principals, something he announced Tuesday. He said now is the time to spend for the state's future, particularly given Georgia's healthy reserves and strong bond rating, as well as the low cost of construction in a down economy.

"Don't hear me dismissing the scope or severity of this downturn," Perdue said. "But, more importantly, don't leave failing to hear the message that we need to look beyond this downturn."Perdue proposed a new 1.6 percent fee for hospitals and insurance plans to help fund Medicaid and PeachCare. That will help the state draw down the federal money it needs to avoid major cuts to the programs, and to increase reimbursement rates to health care providers, Perdue said.

Perdue also said the change, along with tack-on fines for "Super Speeders," will allow the state to put $60 million into trauma care funding. That would help hospitals cover the cost of expensive emergency room operations and could improve the state's emergency infrastructure in rural parts of the state.

The governor also proposed a re-organization the Georgia Department of Human Resources, which oversees social service programs for the poor and infirmed. Many of the departments functions would be moved to the Georgia Department of Community Health, which would be renamed the Georgia Department of Health.

A new Department of Behavioral Health would also be created to deal specifically with mental health and drug addiction programs now handled by the DHR, Perdue said.

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