Perdue: Slow economy means millions should be cut from budget

ATLANTA - Gov. Sonny Perdue said Monday the state's flagging economy is making it necessary to cut millions of dollars from the budget.

Perdue said months of sluggish tax collections mean the state may not bring in enough money to meet its budget for the current fiscal year. Instead of dipping into a $1.5 billion reserve fund, Perdue wants Georgia to tighten its belt in case even tougher economic times are ahead.

``As we see the economic clouds gathering over the nation, I think we can expect these will not miss our state,'' Perdue said at a Capitol news conference.
Georgia's woes mirror the slowdown across the nation, which some are painting as a recession.

On Monday, state money managers released new data for February which showed tax collections ticking up just 0.5 percent from the same month the year before. In January, they were down 7.1 percent. Revenues for the fiscal year that ends June 30 are up a meager 1.9 percent.

Perdue has the sole authority under the state constitution to adjust revenue estimates, meaning lawmakers cannot spend more than the ceiling he sets. On Monday he said he would trim $65 million for the current fiscal year and another $245 million for the year that begins July 1.

He said he's asking agencies to hire only necessary positions and to curtail discretionary spending, like travel. A Perdue spokesman said that restriction would not impact Perdue's upcoming six-day trip to China to open a new trade office there. The state is picking up the travel tab costs for Georgia officials.

While Perdue can set the revenue estimates, legislative appropriators will have a large say in how cuts are implemented.
Lt. Gov. Casey Cagle said in a statement that he agreed with the governor's move to reduce spending.

``It is always our goal to lead in a fiscally responsible manner,'' Cagle said.
There was no immediate comment from House Speaker Glenn Richardson.

House Republicans had pledged to restore austerity cuts to the formula funding for schools in the coming fiscal year worth about $141 million. Perdue had pushed through those cuts and seemed cool to the idea of restoring the money.

The new revenue numbers may take away the ability of the House to restore that money this election year.

The grim economic news comes as the Legislature heads into the home stretch of its 40-day session.

In a letter to the heads of the House and Senate appropriations committees, Perdue recommended which programs he thought were dispensable.

Perdue said the $65 million could come by eliminating money for school technology and buses.

In fiscal year 2009, Perdue included a laundry list of proposed cuts, including $2.8 million from the office of the Governor that were supposed to be used for an emergency fund. He would also scale back raises to some state employees from 2.5 percent to 2 percent.

Associated Press Writer Dorie Turner contributed to this report.

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Georgia Department of Revenue: www.etax.dor.ga.gov
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