Stimulus won't solve state's money woes

ATLANTA --- Despite billions of dollars in federal stimulus money, Georgia is still feeling the impact of the recession and should brace for more bad news, a parade of public officials said Thursday.

They were testifying before a committee of Democratic senators who intend to take the comments and produce a list of recommendations in coming weeks.

State Superintendent of Schools Kathy Cox, who is a Republican, told the dozen legislators drifting into and out or the meeting that nearly $2.5 billion in federal funds has been distributed to local school systems but that it's only temporary relief.

"We are not anticipating good news," she said.

Sen. Ed Tarver, D-Augusta, wanted to know how bad it could get.

"At what point will it get critical for public education? At what point do the cuts in state funds be so great that they negate any impact we're getting from stimulus dollars?" he asked.

Mrs. Cox said she didn't know but that last week's announcement teachers would be furloughed for three days when students aren't present shows the situation was already critical.

Labor Commissioner Michael Thurmond was just as blunt.

"It's all but certain that the unemployment rate will continue to rise over the next few months," he said.

The current unemployment rate is a record 10.1 percent. The state's unemployment insurance trust fund that pays benefits to the 160,000 who currently qualify has dropped from $1.1 billion in December to $593 million today.

"I think the next 60 days will be critical in how we're going to manage it," he said.

And in the field of highway construction, where federal money for "shovel ready" projects was designed to give a quick boost to the state's economy, the results have been disappointing, said David Moellering, executive director of the Georgia Highway Contractors Association. That's because money problems at the Georgia Department of Transportation resulted in almost no traditionally funded projects in the last two years, meaning the new federal money isn't serving as a stimulus, just a replacement for the state funds.

"We have not seen the stimulus create any new jobs," he said. "We have only seen a suppression of layoffs."