State leaders look at fees to balance budget

ATLANTA — Hundreds of state fees likely are headed up — and some of them way up — as state leaders zero in on at least one piece of a much larger budget puzzle.

It also looks like the annual sales-tax-free, back-to-school shopping weekend will fade away this year as legislators become more desperate in their efforts to find revenue and balance the state budget. Several other tax exemptions scheduled to sunset this year also are likely to come off the books.

“We’re taking a real close look at all of them that are up for renewal this year,” Speaker of the House David Ralston said Tuesday evening, adding that Georgians would rather pay sales taxes on school supplies than see more teacher furloughs.

“It’s hard for us to re-up on the exemptions when we’re cutting a billion out of the budget,” said state Rep. Larry O’Neal, R-Bonaire, who heads the House committee that writes tax code.

These changes are part of a much broader effort to get hold of the state budget as state revenues continue to plummet. Legislators are looking for cuts, but a few new revenue measures are making their way into the new budget plan state leaders are hashing out.

To that end, a pair of bills moved forward Tuesday that would allow state departments and agencies to increase the fees on their own. Another bill is expected later this week to raise some fees more immediately through legislative mandate.

The idea is to take many of the 1,800-plus fees the state charges for various licenses, court costs and inspections and raise them until they fully — or close to fully — fund that government function. Many fees haven’t changed in decades, something the state Department of Audits has pointed out more than once in recent years.

“In certain departments they don’t know when they were last set,” state Rep. Richard Smith, R-Columbus, said Tuesday.

Smith, chairman of the House Budget and Fiscal Affairs Oversight Committee, is carrying legislation to allow department heads more power to set their own fees, and those bills cleared subcommittee Tuesday. He said more legislation specifically raising some fees would be ready later this week.

Smith said he couldn’t predict the budget impact these changes would have. He also singled out hunting license fees as one of the few that wouldn’t go up, at least not this year. But he noted that the Georgia Department of Transportation charges just $10 to license a new airport and said that one probably will increase to $100 per runway.

But that won’t make a massive dent in the $1 billion — and some believe it will be much more — that legislators are looking for. They want to avoid a 1.6 percent hospital revenue tax Gov. Sonny Perdue wrote into his version of the budget. They’ll have to find some $300 million to replace that proposed revenue.

They’d hoped to avoid Perdue’s plan to sell off some of the loans the state holds through its Georgia Environmental Facilities Authority. The loans have helped local governments pay for infrastructure improvements, and selling some of the debt for quick cash would mean fewer loans in the future. Senate Appropriations Chairman Jack Hill, R-Reidsville, said Tuesday he doesn’t think legislators will find enough cuts to avoid the sale.

“We’re assuming that’s going to happen,” Hill said.

There are several pushes to raise taxes, and a $1 increase in the state cigarette tax seems to have the most momentum. Rank-and-file legislators — including Republicans ordinarily dead-set against taxes — seem to favor the idea more and more. But both Hill and House Appropriations Chairman Ben Harbin, R-Evans, said Tuesday that they don’t think the new tax will fly.

Hill said, as others have, that an increase might lower revenues as people buy fewer cigarettes. That may have a health benefit, but it won’t balance the budget, he said. Harbin said he didn’t “see the cigarette tax happening this year in a way to benefit this budget.”

Everyone’s favorite budgetary phrase at the Capitol seems to be “everything’s on the table,” meaning any program might be eliminated, thousands of state employees could be laid off and a tax increase might even be considered despite the Republican majority in control of both chambers and the governor’s office.

But, with few exceptions, legislative leaders are either playing things close to the vest or don’t have a consensus budget plan. They expect to be in session into mid-April and likely will be working on the budget until close to the session’s end. Until then, exactly where they’re going to find $1 billion in a state budget that’s already been raked over for cuts remains unclear.

“The bottom line is we’re going to make the cuts,” state Rep. Allen Peake, R-Macon, said Tuesday after emerging from a longer-than-usual caucus meeting for House Republicans. “We’re going to right-size government by necessity.”