Politics & Government

Budget cuts loom, but influx of stimulus money may change plans

Money is always at the heart of a legislative session, but state leaders say it will dominate more than usual this year as they deal with falling revenues in a struggling economy.

On one hand, legislators will have less cash to divvy up for day-to-day operations when they gather in Atlanta for the 2009 session.

But on the other hand, Georgia appears to be on the cusp of a public building boom financed in part by an aggressive borrowing program promised by Gov. Sonny Perdue. That would mean more money than in most years to build roads, bridges and just about any other brick-and-mortar project.

And just as Perdue releases details of his plan, legislators will be learning more about a similar federal program. President-elect Barack Obama’s administration is expected to pump hundreds of millions of dollars into building projects.

So with cuts to find and projects to fund, it seems debate over new laws and programs will take a back seat to fiscal wrangling this year when the session opens Jan. 12.

“Without a doubt,” said Lt. Gov. Casey Cagle, who presides over the Georgia Senate. “I think this session will clearly be dominated by the financial concerns that we have at the state, and what programs we can keep and those that we have to reduce and those that we have to eliminate.”

Cagle and others are playing it close to the vest for now about which programs will take the biggest cuts. And though transportation projects have clearly been made a priority,

Perdue isn’t expected to name individual projects in his bond package until the first week of the session.

Legislators will have 40 days to meet and hash everything out. They can stretch those days out over several months, but both Cagle and House Majority Leader Jerry Keen predict a relatively quick pace to the coming session.

Issues for Macon and Bibb County

For local legislators, consolidation of the Bibb County and city of Macon governments may come up this year, but there’s not much hope for movement on the issue. The hotter issue likely will be how to split up local hotel-motel tax revenues.

A proposal to add a penny to that tax, also called the occupancy tax, to help support the Georgia sports and music halls of fame is expected to work its way through the local delegation.

Both halls have taken cuts in their largely state-funded budgets. And with legislators looking for more cuts, they’ll likely be targets again.

There’s a second proposal to take some of the money from the tax, which now supports Macon’s annual Cherry Blossom Festival, and give it to the Tubman African American Museum and the Georgia Children’s Museum. If pushed, that could generate a lot of debate among local legislators, as the relative worth of the festival is weighed against the the worth of the museums.

In a separate issue, state Rep. Allen Peake, R-Macon, wants to change the Bibb County Commission’s structure, revisiting a 2003 decision to make the commission chairman’s job part-time.

“If the guy’s going to work full-time, he ought to be paid full-time,” Peake said.

Peake also said he plans to push to make city elections nonpartisan and to move the elections so they line them up with county elections.

Taxes, new and old

Along with figuring out how to spend the money the state does have, legislators will be talking about new revenue sources and changing the way local governments are allowed to raise property taxes.

Last year’s session was dominated by the property tax issue, with reform falling short of approval.

Now, a proposal to cap reassessments has significant support in both the House and Senate and is expected to pass. Legislation already has been filed that would prohibit local tax offices from increasing the value of a property — which is used to figure the taxes owed — by more than 3 percent a year or the rate of inflation.

“I think something’s going to happen in that line that’s just going to cause more transparency,” said state Rep. Larry O’Neal, R-Warner Robins.

As chairman of the House Ways and Means Committee, O’Neal is heavily involved in tax legislation.

There also is a proposal to change the way sales taxes are collected, giving local governments the ability to privatize collections instead of having the state handle them. A similar system in Alabama has led to increased revenues, according to proposal supporters, and O’Neal said he’s eager to hear debate on the issue.

Legislators also will be maneuvering on the state’s homestead exemption grants, which give property owners a break on their property taxes. The state sends local governments money to make up the difference.

Perdue has held that money back during this year’s economic downturn, and numerous legislators have said they want the money put back in the budget this year, though they might support downsizing or even ending the program in the near future.

A new transportation tax likely will be debated, because the Georgia Department of Transportation says it has billions more in projects that it wants to build than it has actual money to build them.

One of the most popular ideas has been a regional sales tax, which would allow several local governments to band together and put a new penny sales tax in place to pay for projects.

Other ideas have been discussed as well, and transportation officials have said drivers should expect toll roads that would finance privately built highways to be part of future funding plans, especially in the congested metro Atlanta area.

O’Neal and state Sen. Cecil Staton, R-Macon, said they will continue to push for a new source of trauma care funding. Both have said they’d like to see a dedicated funding source to help existing hospitals deal with funding shortfalls in emergency rooms, as well as to pay for expansions in the state’s trauma care network.

Although he put about $60 million in the budget for trauma last year, Perdue is on the record against such dedicated funding sources. He has proposed a new fee on health services that could help fund trauma care, among other health needs. But so far that’s just a proposal — a starting point for discussion, according to the governor’s office.

And it may prove difficult to pass any new taxes, even though proposals such as the regional transportation sales tax would require voter approval in statewide and local referendums.

“I’m very reluctant to impose any type of tax increase or revenue enhancement plans in a difficult economy,” Cagle said, in a sentiment echoed by many legislators. “My preference is to gain efficiencies in state government and reduce the size of government.”

To contact writer Travis Fain, call 744-4213.

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