It was a gloomy week of budget hearings at the Georgia Capitol as state legislators heard in sometimes stark terms what a steep new round of budget cuts could look like.
Heading into this year's legislative session, many of Georgia's ruling Republicans had pledged not to raise taxes to balance the state books. Now some are saying that tax or fee increases may be needed to avoid crippling cuts.
House Speaker David Ralston said everything is on the table, including a tax hike for cigarettes or a new fee on hospitals and health care plans. Those had once seemed unpalatable.
But worse-than-expected tax collections for the month of January have dramatically altered the political landscape at the state Capitol. Georgia could be facing another $1 billion-plus shortfall in the fiscal year that begins July 2011.
Legislators said the choices are grim.
"Layoffs are inevitable," said state Rep. Austin Scott, a Tifton Republican who sits on the House Appropriations Committee.
"Whole programs will have to go," he said.
At budget hearings this past week, a parade of weary state officials said they've cut down to the bone.
"We are a very tired group of people," Department of Human Services Commissioner B.J. Walker told lawmakers on Friday.
"We've got large caseloads on the ground and one furlough day a month. It's not easy and it's very rough out there."
Gov. Sonny Perdue has been pushing for a 1.6 percent bed tax on hospitals to fill part of the budget hole.
Facing a skeptical state Legislature, Perdue's office distributed to reporters a Wall Street Journal chart that ranked state governments by the amount spent per individual in 2008, before the state really began to chop its budget. Georgia had the lowest spending in the nation.
"It shows that it was a lean budget before the downturn started," spokesman Bert Brantley said.
Besides the hospital tax, Perdue has proposed siphoning money from a state environmental loan fund popular with local governments for infrastructure improvements. He projects 4 percent revenue growth in the coming fiscal year, an estimate that is now looking optimistic.
Even with the rosy revenue forecast there are deep cuts.
Walker said that she would lose 137 eligibility workers for food stamps and Medicaid. That slows the processing time for those benefits from 30 days to about 50, she said.
State education officials said that if the fiscal picture continues to worsen, districts should be allowed to reduce the number of days students are in the classroom every year rather than automatically subjecting to teachers to more unpaid furlough days.
Scott Austensen, deputy state school superintendent for finance, also told lawmakers that state tests for first- and second-graders could be on the chopping block. So could advanced placement tests.
Georgia public college students could face a whopping 77 percent tuition increase if the state cuts go through, university system Chancellor Erroll B. Davis told lawmakers,
"You can't give top-flight quality, accept everyone you want to be educated, put them all in small classrooms and offer all the majors that people demand while we're cutting - not millions, not tens of millions - but hundreds of millions out of the system," Davis said.
Legislators pushed back, arguing that Regents should cut their administrative costs before hiking tuition and fees for students.
Lawmakers in the coming week or two must chart a course forward. And nearly all choices have downsides.
Layoffs would boost the state's already high unemployment rolls. An early retirement offer would strain the state's pension fund and could take years to implement because of a state law demanding an actuarial study.
Already the state has shaved nearly 5,000 positions through attrition and not filling vacancies.
Education is one of the biggest chunks of state spending. But cuts to teachers and classrooms are unpopular, especially in an election year.
"There's the rhetoric. There's the ideology. This week the General Assembly heard in very blunt terms what the reality is," Alan Essig, executive director of the nonpartisan Georgia Budget and Policy Institute, said.
"It's not pretty."
Associated Press Writer Dorie Turner contributed to this report