Gov. Sonny Perdue on Tuesday asked House and Senate budget writers to support his plan for boosting funding for transportation and warned them that more cuts loom.
Perdue was the first official to speak to the annual coming-together of the House and Senate appropriations committees’ week of hearings on changes necessary to the current fiscal 2010 budget as well as the “big budget” for 2011.
“When I was here in this meeting a year ago, we had gotten our December (revenue) numbers and they were surprisingly down, ” Perdue said. “We didn’t realize that was only a harbinger of the future.”
Over the next five months, he said, Georgia’s tax collections averaged a 20 percent decline.
“Only when we get back out of this crisis will we be able to understand the magnitude of managing through that level,” Perdue said. “You have to back 70 years in Georgia history to the Great Depression to find a legislature and a governor dealing with an economic situation similar to what we have here.”
That’s the bad news, he said. The good news is the state’s economic picture should not get worse, and Perdue’s budget proposals reflect that optimism. His plan for cutting an additional $1.2 billion from the $18.6 billion budget that runs through June 30 assumes no further decline — and no growth — in state revenues over the next six months. And the budget for 2011, which begins July 1, would assume about 4 percent growth, resulting in an $18.2 billion spending plan.
“That assumes we will grow again,” Perdue said. “But even, listen closely now, that’s not money you’re going to have to spend. Even with that revenue uptick, the loss of one-time funds, growth in formula-driven programs such as education and Medicaid, will force you again to make further cuts. This won’t surprise you.”
For most state agencies, Perdue said, most of the cuts to the current year’s budget have already been made.
But Perdue was also frank about the dangers facing the state. In fiscal 2012, which will begin July 1, 2011, the state will lose about $1.4 billion in federal stimulus funds and faces about $800 million in estimated increased costs for education and Medicaid.
“I hate to total it up for you, but that’s a budget gap of almost $2.2 billion,” Perdue said, adding that overall the budget shortfall could reach $2.6 billion.
That looming budget hole, he said, is one reason he has urged t hem to “do the hard thing now” and make necessary cuts to position Georgia for those days ahead, days when he will no longer be in office.
“I sense a deep responsibility to pass this torch and hand off a state on sound financial footing,” he said.