Senate’s budget writer says state’s hole is deeper than predicted

Senate Appropriations Chairman Jack Hill, R-Reidsville, warned Monday that the state’s budget hole for next fiscal year is closer to $2 billion than to the $1 billion that’s been discussed.

Hill was in Athens with other lawmakers for a pre-legislative session conference and spoke to WABE’s Denis O’Hayer, the local host of “All Things Considered.” You can hear the entire interview on WABE’s website.

In the the interview, Hill acknowledged that the state’s budget hole for fiscal 2012, which begins July 1, is at about $2 billion and drops to $1.3 billion once you consider the loss of one-time funding or federal cash as well an expected round of cuts to state agencies.

Despite the positive news that state revenues are growing, Hill said it’s not enough.

“The growth rate that the economists tell us we can expect is not high enough to make up for the tremendous hole we have,” Hill told O’Hayer.

O’Hayer asked the next logical question: Where does the money come from? Could it be that the special tax council that has been studying the state’s finances will recommend putting the sales tax back on groceries? Hill said he didn’t know, but A.D. Fraizer, the head of the tax council, will speak to lawmakers in Athens on Tuesday. The council’s report is due to lawmakers no later than Jan. 10, the first day of the next legislative session.

“I don’t find a whole lot of support for [putting the sales tax on groceries] in walking around the halls,” Hill said, acknowledging that he and others need to “educate members of the House and Senate on how deep the hole is and how big the poblem is.”

It’s not an easy answer, Hill said, but the bottom line is the state needs to raise more money.

“That’s what it boils down to,” he said.

There’s no “political” appetite for a general tax increase, but Hill hinted that pairing an income tax cut with a “broadening” of the state sales tax could be one part of a solution. The sales tax has remained flat through good times and bad, he said, which tells him that it’s too narrow — in other words, not enough services or products are subject to the tax.

“I don’t believe a tax increase pure and simple could pass this Legislature,” Hill said.

48 comments Add your comment

Bobby

December 13th, 2010
9:52 pm

Oh heck. The State has enough money to give Perdue’s cronies for Oaky Woods. Gov. Crooked Deal is going to make sure the working class of Georgia pays their fare share while enriching his partners. Just watch. We are truly one of the most crooked States in the U.S. today.

tore

December 13th, 2010
10:07 pm

The republicans took control of this state 8 years ago, and they have managed to destroy our economy. The people of Ga. rewarded them for their incompetence, by electing more of them into power this past election. When Deal cuts more out of education, and we end up last in the country, hopefully the voters of this state will learn a lesson. The republicans talk up God, guns and anti-gay rhetoric because they know that there base gets turned on by this. Conservatives need to get beyond these three agendas before Ga. is the laughing stock of this country. Deal will be indicted for corruption before his term is over.

General Sherman

December 13th, 2010
10:09 pm

Where does the 30 million fit in this equation? The purchase could have waited,crooked ass politicians and greedy governor!

get a clue

December 13th, 2010
10:10 pm

$28,700,000 to take land off of the tax base as preservation of a bear habitat next to the governor’s 100 acres.

$40,000,000+ for GoFish, the governor’s wasteful fishing expedition.

And OMG, we have a shortfall in revenue!!! No *#feces*#!!!

What’s the solution…form a blue ribbon commission in order to divert decision making responsibility from those we elect to make tough decisions.

GOP, Dems, there ain’t no difference…they all care about only one thing; re-election.

General Sherman

December 13th, 2010
10:15 pm

Amen to that Get a Clue.Do not forget about the money for little league in his home county and 10 million for college football hall of fame.This is total bs and crooked.

General Lee

December 13th, 2010
10:32 pm

Why not just cut spending??? Gesus H Krist! These people are UN BE LEAVE A BLE

robert

December 13th, 2010
10:37 pm

This elected officials in ga who i did not vote for only know how to make money for themselves and their cronies. They never worked for or ran any business that tried to help average people who might have been their employees. They should be living up their on the east side with the George Jefferson types in New York with their Wall Street buds. They do not have the interest of the average Georgian at heart, The last eight years prove that beyond a doubt. If this keeps up georgia will just sink under Fla into the sea like the ancient city of Atlantis.

Keith

December 13th, 2010
10:46 pm

Georgia Republicans did not destroy the state’s economy. This is a worldwide economic meltdown. On the contrary, while many states have run up massive debts, Perdue and the state legislature have managed Georgia’s budget so well that they have maintained the state’s Triple A bond rating. Talk to national financial folks and they will tell you Georgia has done a great job navigating the meltdown.

Jonas

December 13th, 2010
10:51 pm

We need to start getting rid of entire state agencies.

Biggus Teacherus

December 13th, 2010
10:58 pm

In regards to Keith, in the last 3 years, Perdue has given me no pay raise, but they have furloughed me, raised my health insurance 2 or the 3 years and given me more students in my classroom while cutting funding for our school system. I still spend much of my own money for my kids (students) because I am a professional and will continue to teach like one. Now if I could only get paid as a professional. Why not spend money on going after all the dead beat citizens and businesses that refuse to pay their taxes. I pay mine and so should they! Look up the numbers on uncollected taxes in this state and it will SHOCK you. On another subject, the nepotism in this state is out of control! Off of my soapbox I go!

firedteacher

December 14th, 2010
12:38 am

$28M = 56 fired M.A. carrying teacher unjustly fired while the good ole boys club squanders public funds…. meanwhile the populous starves and cannot heat their homes… we cannot keep this up…. it is not supportable!

Eagle Eye

December 14th, 2010
3:15 am

My fellow colleagues of GA, you should be rejoicing that a GREAT plan has came to fruition. You asked for this GREAT leadership, so be happy as you absorb the pain that they will cause you long-term. In 2014,I recommend that you place your party loyalty aside, and you should vote for someone who cares about your best interest.

Lucky to be Employed

December 14th, 2010
5:30 am

Biggus Teacherus is another whining union protected employee. Sweetheart, what industry in Georgia, and what employee in Georgia, hasn’t faced the same hardship as you over the past three years?! You said you’re a professional so quit your whining and be grateful you still have a job!

poorboy

December 14th, 2010
5:39 am

boo hoo keith an teachurus try making a living on less than $300 a wk with the same furloghs an pay raises thats the way it is at uga thanks the purpue an adams hard to fill sorry for the teachers and professors making what they make.keep voting those repub. in we will all be out of work or servants to them.

BitterEXdemocrackkk

December 14th, 2010
6:40 am

North Carolina is facing close to $4 BILLION in deficits after 112+ years of democrackkk domination, manipulation and corruption. Finally, the 2010 election brought some hopeful coming relief from the chokehold.

hadit

December 14th, 2010
6:57 am

What is not said in the article is how much Medicaid is taking as a slice of the budget. The burdgeoning Medicaid class is the kicker in breaking the budget, but they are not talking about it.

grizzybear

December 14th, 2010
7:14 am

get rid of all tax exemptions for special interest groups!

SavvySausage

December 14th, 2010
7:32 am

OK Jonas, which agencies would you suggest hit the chopping block first???

BurningMan

December 14th, 2010
7:36 am

@ tore “The Repubs took control of Georgia 8 years ago and ruined the economy”…. if you are dumb enough you might argue that for Ga but what about California, Colorado, New York, Michigan, Massachussets, etc.etc.etc. What about the Federal Government?? Its currently got a Dem. president, Democrats House and Democrat Senate. What happened to all of their economies??
@ get a clue The Go Fish Initiative was $14M not 40 and either way the state is BILLIONS of dollars short and you come up with $14M spent two or three years ago a the cause!

Andy

December 14th, 2010
7:41 am

Biggus Teacherus, didn’t you get the memo? The only people who don’t have to tighten their belts in this economy are the super rich and corporate executives. The rest of us are suppose to shut up and be glad for whatever crumbs fall on the floor.

Willis

December 14th, 2010
8:05 am

I wonder if there will be any reductions in staff and luxury at the Governor’s Mansion on West Paces Ferry Road in Atlanta? Do you think the Governor gives a whit about what the thermostat is set on like us common folk? I wonder who has the contract for keeping the grounds and mansion maintained? Probably one of Sonny’s buddies who helped him out with Oakey Woods.

Road Scholar

December 14th, 2010
8:21 am

Andy, add politicians to that list!

Bill

December 14th, 2010
8:25 am

Lucky,

There are not teachers unions in Georgia.

Bill

December 14th, 2010
8:27 am

Keith is correct, that Georgia under the republicans has managed to maintain its AAA bond rating. This is due in no small part to the Obama stimulus plan, 40% of which was used to supplement state governments.

Bill

December 14th, 2010
8:31 am

Hadit is correct, Medicaid is a big part of budget woes for every state. The roles have grown during the economic downturn, but the growth in medical costs accounts for more. Growth of Medicaid spending has been crowding out education spending for probably 20 years. So Hadit, what is the solution?

Bill

December 14th, 2010
8:32 am

Grizzy – Your sentence is too long.
Get rid of all tax exemptions.

Fairness for All

December 14th, 2010
8:33 am

All citizens above the poverty line should pay taxes to support their federal, state, and local governments and spending should be cut. Taxes should be increased on both people making over a million (note a million does not equal 250k) and on people not currently paying any taxes that make over the poverty line. The state of Georgia needs to reduce it’s spending and broaden it’s tax base. Restoring the sales tax on groceries or increasing the gas tax would be examples of some simple and fairly painless way to this. Too many people are used to getting too many freebies, tax credits, and tax breaks from the government. Another way to raise revenue would be a sports/entertainment tax–simply place a $1 or $2 tax on each ticket sold to sporting events and entertainment evens (concerts). A fair and flat income tax would be preferable to the present tax system. The day is fast approaching where people will realize the rich can’t be taxed to death while 50% pay nothing. To balance budgets everyone will have to pay and cuts will have to be made. Listen to the howling and gnashing of teeth when those people screaming to tax the rich have to actually contribute some on their own.

khc

December 14th, 2010
8:44 am

need to reduce number of legislators and their budgets too……way too many and a good number use the post to augment their finances…..real shame we can’t get the best folks to serve

Progressive Conservative

December 14th, 2010
8:47 am

Satisfy the budget needs by changing the tax code. Problems with the current tax code:
- Income tax complexity is expensive to administer and hard for taxpayers to comply
- Perpetual taxpayer uncertainty over amount owed
- Non-compliance only takes the effort of one individual
- No income filings from illegal activity or undocumented residents
- Limited visibility and transparency for citizens and government until too late to act

Replace Georgia’s increasingly uncertain, growth inhibiting, income-based tax structure with a simple, progressive consumption tax.
- Eliminate the GA Individual Income Tax
- Eliminate the GA Corporate Income Tax
- Rein in the list of current sales tax exemptions
- Collect a consumption tax on new retail goods and services of <8%
- Provide a monthly consumption tax rebate to every registered GA household to compensate for taxes paid on essentials
- Generates as much state revenue as the current system under a more stable basis
- Collection system already exists

Watch the jobs flood into Georgia and tax revenues soar. Better education, better public safety and services – the Georgia we want.

khc

December 14th, 2010
8:51 am

please cite studies to support your proposals….

Don

December 14th, 2010
9:25 am

That’s right. Move the tax burden as low as possible on the income scale, and jobs will flood the state. I second khc: studies?

retireds

December 14th, 2010
9:27 am

After reading the above posts it seems that there is the usual impasse leading to the usual blame game. Dems say Repubs no good. Repubs say Dems no good. Feel good rhetoric but no solutions worth a tinkers d___.

fulldawg

December 14th, 2010
9:48 am

@ Keith, like those rose colored glasses huh. Hope you like the Kool-aid buddy.
@ Lucky to be Employed You sound like a page off of Boortz book, teachers are NOT unionized in Georgia, more Koolaid?
You guys are clueless….

Base

December 14th, 2010
9:52 am

Must not be too bad we can still buy land that Sonny wants and personal projects for the legislature!

[...] Math is hard: Senate Appropriations Chairman Jack Hill, R-Reidsville, warned Monday that the state’s budget hole for next fiscal year is closer to $2 billion than to the $1 billion that’s been discussed. [...]

Bill

December 14th, 2010
10:08 am

Fairness,
There are many ways to view what is fair, and I agree that some of your ideas have merit. However, one reason that the rich pay such a large portion of taxes is because they have such a large proportion of the income. the top 1-2% receive about 26% of the income. The top 5% also own most of the assets. I agree that everyone should contribute something, but you cannot get blood out of a stone.

Prog-Cons,
This is an idea that has gotten a lot of press lately, but I have two concerns. First, we have been told by economists for at least three decades that consumer spending drives the economy. If we stop taxing income and tax consumption, savings will likely increase, but at the expense of economic activity. I fear it would drive the economy down. Secondly, since poor (and many not so poor) spend all or nearly all of their income to meet their needs, they will be taxed disproportionally. This includes a good bit of the middle class. If you are basically living paycheck to paycheck, or month to month, you will pay most of the taxes. Those at higher income levels have more disposable income. However, they will be less inclined to dispose of it, and more inclined to save and invest (tax free). This shifts the burden from the upper economic group to the middle and lower economic group.

Bill

December 14th, 2010
10:26 am

For more on income inequality see: http://www.cbpp.org/cms/index.cfm?fa=view&id=3309 Look especially at figure 3.

RSC

December 14th, 2010
10:35 am

I know… let’s give tax credits to corporations and more tax cuts to the wealthy. That will take care of all of our problems!!

JRev

December 14th, 2010
10:51 am

Although it won’t come close to solving the problem, allowing alcohol sales on Sunday seems like a no-brainer. It’s time we stop letting people on moral high horses tell the rest of us how to live our lives. It’s time to join the 20th century, let alone 21st. Also, legalize and tax marijuana, prostitution and gambling (for churches too). Freedom is not just for people who think exactly like YOU do. As I said, this is not going to solve the financial woes of our state, but it will certainly help, and have a great impact on business in our state, along with freeing up police to fight REAL criminals.

[...] and which may disappear now that states are having to balance budgets without stimulus cash. See here for a description of what Georgia is [...]

double

December 14th, 2010
11:20 am

If the state goes ahead with the Oaky deal,then raises taxea or fees mark this on your calendar and vote against every politican in power at this time.

catlady

December 14th, 2010
11:52 am

Fairness: some of those 50%ers ARE the wealthy (see Deal’s tax rate of 2% in 2007 on an income of about $200,000.) You need to do some thinking–poor folks pay gas tax, sales tax, property tax, etc. Don’t keep parroting what you hear on FOX.

khc

December 14th, 2010
12:05 pm

where are the studies progressive conservative?

Bev

December 14th, 2010
12:28 pm

Look, folks, you elected these jokers to the state legislature and to Congress. You’re just getting what you paid for. But just wait; you ain’t seen nothin’ yet. They’re about to sock it to all of us with federal taxes, state taxes, county (and/or city) taxes and school taxes (although some of these they might call ‘fees’). In return, you’ll get (a) no raise; (b) more taken out for health insurance, pensions, etc.; (c) increased prices for gas and groceries; (d) increased sales taxes on groceries and professional services; (e) no HOPE scholarships for your kids because they’re getting ready to amend it so only those with top GPA’s will be eligible (and the list will go on from there). But you wanted them; you’ve got them!

Robert

December 15th, 2010
7:02 am

Things have not changed since I been on this earth, rich get richer, poor get poorer. A reflection back to medieval times in Britain looks the same as today. Rich get richer, poor get poorer. We are born, pay taxes, exist, die. What a life.

[...] deficit facing Gov.-elect Nathan Deal and the state Legislature is approaching $2 billion, and Deal is already warning that education budgets will once again be slashed. More teacher [...]

Saxby funding retirement

December 15th, 2010
1:27 pm

Well Saxby Chambliss must be funding his retirement while he can. Did you know he has an earmark bill in the Federal budget for next year that funds a company in ALABAMA! Not Georgia folks, but Alabama! What a loser. And we wonder where all the money goes.

[...] certainly not when the state is eyeing up to $2 billion more in budget cuts. Far from paying inmates, the Georgia Department of Corrections, like other state agencies, will [...]