UPDATE: Perdue on Georgia budget: 'Less with less' (Watch the video)

ATLAN TA – In his state of the state address Wednesday morning, Georgia Gov. Sonny Perdue recommended using the state’s $1.2 billion in reserves to help ease a growing state budget crisis.

“We have worked for six years to do more with less, at some point, in business or government, it becomes less with less,” Perdue told a joint session of the General Assembly in the House chambers.

Perdue’s amended budget for the current fiscal year calls for a $2.2 billion shortfall. He has recommended the lawmakers knock the current budget from $21.5 billion to $19.2 billion.

That includes using $50 million in reserves.

The proposed budget for fiscal year 2009-10, which goes into affect on July 1, calls for a $20.2 billion budget.

The state will tap into $408 million in reserves to balance that budget.

“Despite the stresses of a moment like this, we must not allow ourselves to be trapped in a short-terrm mindset where rash decisions result in dire long-term consequences,” Perdue said. “We must remain focused on the big picture. .. Our perspective must be one of optimism even in the face of difficult economic cycles.”

Perdue and House Democratic Caucus leader Calvin Smyre of Columbus met Monday to talk about the possibility of federal help with the state’s transportation and health care needs. Smyre is connected to the President-elect Barack Obama's transition team and has been working for federal help for Georgia in an economic stimulus package.

While Perdue offered praise for Obama and said he would be in Washington next week for the inauguration, he said the budget would not wait on the possibility of federal money.

“I am confident he and the new administration will do everything in their power to meet the challenges that face this nation,” Perdue said. “However we cannot plan by relying on the unknown.”

Symre, who was one of the lawmakers sent downstairs to escort Perdue to the House, said he was not surprised by the governor’s stand. In 2007, the state budget was held up for more than a month waiting on federal funds for child healthcare.

“If something happens during the session and we get some federal stimulus help, then it will help ease the pain,” Smyre said.

One of the topics Perdue touched on was reforming the Department of Human Resources and the way that mental health services are provided. That could have serious ramifications for West Central Georgia Regional Hospital in Columbus.

The facility was designated for closure three years ago, but was spared when the mental heath community and state lawmakers fought it with vigor. There has been discussion of privatization of facilities like West Central.

“We have got to be concerned with the reorganization of DHR,” said Rep. Carolyn Hugley, D-Columbus.Smyre agreed.

“I am curious to see what the future holds for the state mental health system,” Smyre said.

Perdue defended his decision to focus on DHR for cuts.

“Folks, we spend $3.8 billion within DHR every year – an agency that hasn’t undergone a major change since it was formed over three decades ago.” Perdue said.

The proposal calls for creation of a Department of Behavioral Health.

“I know some folks will be concerned with how this might affect jobs in their area, but when it comes to mental health, I believe wee have an obligation to provide services to Georgians as close as possible to where they live,” Perdue said.

The governor also focused on education and transportation.

He called for state legislation that would allow the state to remove elected school board members when a local district’s accreditation was a affected. It was sparked by Clayton County schools losing accreditation being pulled last year.

“Never again, do I intend for the state to be handcuffed by our current law and powerless to help students who are being failed by the adults in their community,” he said.

That line drew the loudest applause from the lawmakers.

Seth Harp, R-Columbus, said it was similar to the speed Perdue gave Tuesday morning to state business leaders.“I didn’t hear anything new,” Harp said. “We got to flush it out.”

Lawmakers were given copies of the budget shortly before the speech and had not had time to digest the cuts.

Smyre was struck by the decision to borrow more than $1.2 billion for projects.

“That’s one of the largest bond issues I have ever seen,” said Smyre, who is entering his 35th year in the General Assembly.