As state tax revenues continue to shrink, Gov. Sonny Perdue has ordered some serious belt tightening that will be felt in Columbus and across the state.
The 2009 fiscal year budget, which took effect July 1, was set at $19.08 billion. The state is forecasting a $1.6 billion shortfall. What does that mean to Columbus?
Ask Columbus Technical College President Bob Jones. He called a meeting of his staff Monday afternoon and laid out the grisley details of how he will take between $629,000 and more more than a million out of his $10.5 million state allotment this year.
Word of the cuts severity began to leak out Friday.
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Republican state senators were told in an e-mail from the Lt. Gov. Casey Cagle's offices the requested cuts would be harsh.
Among the proposed cuts:
6 percent across the board cuts to state agencies. This not include the Quality Based Education funding formula for grades K-12 and Medicaid.
5 percent cut to Medicaid and Peachcare, the state-funded insurance program for low-income children.
2 percent cut to Quality Based Education, which will impact every public school district in the state
The state will also defer employee pay raises. This does not include teachers, University System or the Department of Technical or Adult Education due to contractual obligations.
Sen. Seth Harp, R-Columbus, said the cuts are difficult but necessary.
"I will remind you— and everybody else — that the bottom line is we can't spend it if we don't have it," Harp said. "Right now, we don't have it."
The fear is the 6 percent cuts is just the start. If state tax revenue continues to decline, the cuts could be deeper. The state has asked agencies it funds to loook at the possibility of 8 and 10 percent cuts.
The University System of Georgia is ahead of the curve. The agency that govens the state's 35 public colleges and universities asked its schools more than a month ago to look at 5 percent cuts, though Perdue at the time was asking for just 3.5 percent from the system.
For Columbus State University, this could mean cuts of up to $2 million from its $40.5 million state funding.
One of the moves the state is taking is to protect its $1.088 billion reserve fund. The state had to draw $600 million out of it at the end of June to cover the shortfall in the 2008 fiscal year budget. Keeping the reserves at more than $1 billion is wise, Harp said.
"By holding back the billion, the governor is saying 'we ain't there yet,'" Harp said. "And it may be a while before we are there. It is prudent to take out time, see what happens and hope the economy turns around."