Georgia leaders warn more cuts on state’s budget horizon

ATLANTA — Top state leaders issued dire warnings Thursday, saying more cuts will be made to the state’s already chopped budget.

Speaker of the House Glenn Richardson said a special legislative session may be needed to deal with the problem later in 2009.

State parks and universities may eventually need to close, he said. And he warned teachers and state employees that more furloughs will probably be needed to avoid massive layoffs.

“We’re not to (major layoffs) today,” Richardson said. “But we’re not far from it. You better start thinking.”

The speaker called the billions in cuts already made “the tip of the iceberg.” He sent a message to Democrats and anyone else complaining about them: It could be a lot worse, and it may get that way fast.

“I’m afraid this economy is dragging down faster than we can even calculate,” said Richardson, R-Hiram. “I’m afraid it’s coming apart at the seams. ... You better start thinking about drastic actions.”

Lt. Gov. Casey Cagle, who leads the state Senate, said he plans to avoid a special session by identifying new cuts sooner rather than later. Cagle wasn’t specific but said the Senate will make its cuts over the next few weeks “to not just simply kick the can down the road.”

The lieutenant governor also seized on a troubling aspect of the state’s decision to balance the 2009 and 2010 budgets with federal stimulus funding and withdrawals from the state’s reserves. The state can’t do that every year.

That one-time funding will leave holes in future budgets, which Cagle put at $1 billion in 2011 and $1.7 billion in 2012.

Economic recovery and the increase in state revenues that would bring could fill those holes. But with the announcement Thursday that Georgia’s unemployment rate hit a 9.3 percent last month — an all-time high going back to 1976 — optimism faded a bit more.

Gov. Sonny Perdue also warned of a hole in the state’s Medicaid budget, which he said could be underfunded by more than $140 million for the coming year. An independent budget watchdog group, the Georgia Budget and Policy Institute, said that shortfall could top $650 million in fiscal 2011.

With all that going on, House members approved the state’s fiscal 2010 budget Thursday after a floor fight over the big ticket items and a few of the smaller ones, including funding for the sports and music halls of fame in Macon. Many Democrats voted against the budget after House Minority Leader DuBose Porter, D-Dublin, took the well to fight it.

Because the budget doesn’t include funding for a property tax break for homeowners, which in past years the state has handed out to local governments, Porter called it “the largest property tax on homeowners in our state’s history.” He said the state’s decision not to fully fund education will only contribute to property tax increases as local school boards try to make up the difference.

Porter said the state could improve the way it collects sales taxes and realize another billion dollars in uncollected tax revenue.

Porter’s complaints pushed Richardson to the well for his speech. In the end, the House approved an $18.5 billion state budget for fiscal 2010 by a vote of 123-49, moving it to the Senate for consideration. The budget is more than $2.5 billion less than what Perdue initially proposed in January, before state revenues fell more precipitously than they did last year.

The Associated Press contributed to this report.