Perdue aims to cut $1.6 billion

ATLANTA --- A plan by Gov. Sonny Perdue to defer $1.6 billion in spending should avert the need for a special legislative session to address the state's deepening budget crisis, lawmakers and Mr. Perdue's office said Friday.

Mr. Perdue discussed the plan with lawmakers Friday afternoon, as speculation grew that he might call the General Assembly back into session to deal with a deficit that observers say could climb as high as $2 billion if revenues continue to slump.

"The plan laid out today would be able to get there without doing that," said Perdue press secretary Bert Brantley.

Under the blueprint, Mr. Perdue would withhold 6 percent of most agencies' budgets, 5 percent of Medicaid funding and 2 percent of funding for local schools. The move will affect spending for the fiscal year that began July 1.

The reduction in education funding will mostly eliminate an increase lawmakers approved during the legislative session that ended in April.

Mr. Perdue also would hold off on sending Homeowners Tax Relief Grant funding to local governments, though his office said cities and counties would have to decide whether to provide the credit on property tax bills.

Raises for all non-education state employees, set to take effect Jan. 1, also would be deferred.

He will order state agencies to come up with three sets of budget recommendations for lawmakers to consider when they return in January: one cutting spending by 6 percent, another by 8 percent and a third by 10 percent.

The plan accounts for a drop in state revenues of almost 1 percent from the fiscal year that ended June 30, Mr. Brantley said.

House Appropriations Chairman Ben Harbin, R-Evans, said the plan will likely end talk of a special session, at least for now.

"I think overall the governor has done the best job he could do considering the situation we're in," Mr. Harbin said.

Observers almost universally agree the state will not meet its budget for the fiscal year. To do that, tax receipts would have to rise by 8.4 percent, said Alan Essig, the executive director of the Georgia Budget and Policy Institute, a think tank that favors more spending on social services.

"I don't think you see any economist saying we're going to come even close to that," he said.

Reach Brandon Larrabee at (678) 977-3709 or brandon.larrabee@morris.com.