Originally created 03/31/03

Budget is still waiting to pass

ATLANTA - Less than three months after Georgia's first divided government in living memory took office, a game of chicken is keeping lawmakers from performing their most basic function: passing a budget.

At best, the impasse between legislative leaders and Gov. Sonny Perdue is threatening to force an expensive special session to balance declining state revenues with growing costs.

At worst, it could send the state government into the next fiscal year without a new budget.

After July 1, state agencies might be operating only by the grace of a "continuation" budget approved by a Legislature unable to agree on anything more than rolling over this year's spending levels into 2004.

As has happened in other states, that could force Mr. Perdue to impose spending cuts unilaterally to keep the budget balanced, as then-Gov. Roy Barnes did several times last year while the Legislature was not in session.

Georgia governors don't have the legal authority to raise taxes without legislative approval.

Because taxing and spending bills must originate in the House, the key players at this juncture of the debate are Mr. Perdue, the first Republican governor since Reconstruction, and the Democratic-controlled House. That means budget decisions must have bipartisan support.

When it comes to deciding the right combination of tax increases and spending cuts to balance next year's $16.3 billion budget, neither wants to take the lead because of the potential political consequences. As the heat turned up late last week, each side criticized the other for not putting forth a plan to resolve the logjam created when the House soundly rejected the governor's bid to raise tobacco taxes.

"It's not really surprising," said Charles Bullock, a political science professor at the University of Georgia. "People don't like to raise taxes. But they don't like to cut programs, either, so it makes it a difficult situation."

Privately, many Democrats see raising taxes as the only way out of a projected 2004 budget shortfall of $800 million to $1 billion without resorting to devastating spending cuts.

Raising the state sales tax by 1 percent would generate more than $1 billion, the most of any of the proposals being bandied about the Legislature. Both Mr. Perdue and House Democratic leaders have said increasing sales taxes is unnecessary because it would raise more than the state needs.

Some Republicans see the current dilemma as an opportunity to downsize a bloated state government.

House GOP leaders are advocating deeper spending cuts, but they don't have the power to push them through the chamber.

"I'm sure (House Speaker Terry Coleman, D-Eastman) would like us to stick our necks out on taxes, and I'd like to see (Democrats) stick out their necks on cuts," said House Minority Leader Lynn Westmoreland, R-Sharpsburg.

Beyond the split between Republicans and Democrats, the House GOP is divided between lawmakers who won't vote for any form of tax increase, and those who support Mr. Perdue's call for raising tobacco taxes.

The governor was the first to take the tax plunge. During his first week in office in January, he proposed raising tobacco and liquor taxes and rolling back Mr. Barnes' popular property-tax cut initiative.

Mr. Perdue quickly abandoned using property taxes to help balance the budget when the idea got a cold reception in the General Assembly among members of both parties.

Then this month, the governor backed away from raising liquor taxes when it became clear that he didn't have the votes. He pushed ahead with the tobacco tax, only to be shot down by a huge margin last week in the House. Reflecting the Republican split, only 24 of the chamber's 72 Republicans sided with Mr. Perdue. The bill remained alive, however, when lawmakers voted the next day to reconsider it.

"I think you're going to see some movement on the tobacco-tax bill at a reduced amount," said Rep. Tom Buck, D-Columbus, the chairman of the House Appropriations Committee.

A smaller increase in the tobacco tax would leave the state far short of a balanced budget. Even Mr. Perdue's bill, raising the tax on a pack of cigarettes from 12 cents to 58, would generate less than $350 million.

With that reality in mind, Mr. Buck said Democratic leaders will sit down during this week's legislative recess to look for deeper cuts.

Reach Dave Williams at (404) 681-1701 or davemns@mindspring.com.


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