Georgia Likely to Owe Interest to Taxpayers

Slumping tax collections and budget cuts make Alabama and Georgia likely to join California in owing interest to some taxpayers for issuing their income tax refunds late.

Both states have laws requiring them to pay interest to taxpayers who filed by the April 15 deadline but don't get their refunds within 90 days. That deadline is Wednesday.

Tax officials in both states say it appears that interest will have to be paid because thousands of tax refunds are still awaiting payment.

California officials are planning to issue IOUs this month for nearly $200 million in tax refunds. California expects to pay the IOUs in October.

Kansas had also been late in paying refunds, but it borrowed money last week to catch up.

(Associated Press)

School Board in Augusta Set to Furlough Employees and Cut Teacher Pay

The Richmond County school board has passed a $225 million budget for the upcoming fiscal year, making up for a projected $24.5 million shortfall with employee furloughs, cuts in teachers' pay and reductions in teaching staff.

Many of the system's employees will face a furlough of four days -- and therefore cuts in pay. Teachers, who by state law cannot be furloughed, will still take a pay cut in local salary supplements they receive from the school board.

Dr. Dana Bedden, Richmond County schools superintendent:

"Please accept my apologies for any difficulties and hardships the furlough may create. While the furloughs were not something I would preferred, I really believed they were better than layoffs."

Bedden noted that about 90 percent of the school system's budget is personnel costs.

Despite the furloughs and pay cuts, many teachers and employees will still receive pay raises mandated by the state. The raises, known as step increases, will cover a portion of their incomes that they would otherwise lose with the furloughs.

The board is also eliminating several teaching positions through attrition and the non-renewal of some teacher contracts.

The budget comes as school systems across the state grapple with major funding issues due to the troubled economy and significant losses in revenue.

For more information about the budget, click here.

Governor Reduces 2010 Budget

Today Governor Sonny Perdue reduced the 2010 state budget by $1.6 billion . Earlier, the Governor projected 3% growth over this year in state revenue, but with the economy continuing to decline next year's budget will be flat. Perdue is asking state employees to pay 5% more of their health insurance costs. He is also banking on %1.1 billion in stimulus money and the Governor has agreed to take all the available federal stimulus funds for state unemployment benefits. He says it would add $150 million to Georgia's unemployment trust fund. Regarding state employee furloughs, he says he will leave that up to state agency heads.

Clayton Schools To Cut Jobs, Salaries

Clayton County will cut 200 teaching jobs from its school system and effectively slash salaries for administrators and other employees. 100 staff members are also slated to lose jobs, although a county official says the hope is to trim jobs through attrition.

The action for the county just south of Atlanta will save more than $20 million from next year’s budget. Clayton already knows it will get $23 million less in funding from the state next year.

Clayton's school board voted 8-0 Monday night to approve the plan.

Schools Slash Employee Pay

School districts across Georgia are laying off staff and scaling back spending as they cope with millions in budget cuts to state funding. The Fayette County school board has voted to cut employees pay by 4.5 percent this fall. The board voted unanimously Thursday night to slash salaries to fill a $14.5 million budget hole. The 21,000-student district in suburban Atlanta has also cut more than 150 positions.

(Associated Press)

State Revenues Down 14%

Georgia's tax collections plummeted in January. Revenues tumbled 14.3 percent - or $262 million - from the same month the year before. The drop could mean even deeper cuts to the state's beleagured budget. State officials are already slashing about $2 billion in state spending. That has led to the elimination of programs and the furloughing of state employees.

(Associated Press)

Governor offers new plan to charge hospital fees

Rural hospitals worry about a new plan by Governor Sonny Perdue. He wants to cut-down the state’s Medicaid and Peachcare deficit with a new hospital fee. But that proposal could push some rural hospitals over the brink financially.

Within Georgia’s budget deficit of around two-billion dollars is a significant shortfall in funding for Medicaid and Peachcare--insurance for children of the working poor. Bert Brantley with the Governor’s office says it’s a crisis that needs a solution sooner than later:

"If we don’t do something, there will be significant cuts in reimbursement rates to hospitals...in the amount of people that can receive coverage from Medicaid and Peachcare--really some very difficult things that are going to cost us in the long run."

Earlier this year, a plan was put on the table that would charge health insurance companies extra fees. That offering drew strong push-back from insurers. Now, this new proposal would charge every hospital a flat fee based on a percentage of net revenues.

The money would be pooled to draw down more federal money for healthcare. Brantley says it’s something Georgia’s bigger hospitals that specialize in trauma care are clamoring for:

"They want help in the trauma area...they want increased rates for Medicaid. When they cover a Medicaid patient, they don’t get 100-percent for the cost they incur."

But Brantley acknowledges this plan could be a problem for smaller town and rural hospitals across Georgia that don’t offer trauma care and other services covered by federal money. 55 such hospitals in the state are represented by HomeTown Health--the organization’s president and CEO is Jimmy Lewis:

"In rural Georgia especially so many of the hospitals are already cash-starved where we have many who have less than 10 days cash on hand. For them to have to accept a tax on top of what they’re currently doing, especially a tax on current net revenues, would be a catastrophic blow to them."

Lewis says unemployment in rural areas leads to more people who can’t pay for services at those hospitals-making it even harder for hospital cash flow. He says perhaps up to 10 hospitals would be on the brink financially under the proposed fee.

The Governor’s office says the plan is being put forth now to spark full discussion, ahead of the General Assembly session next month.

Unemployment centers expand hours

The Department of Labor is responding to a budget crisis and rising unemployment by shifting to a four-day work week of 10-hour days. Staff will rotate shifts to cover a five-day week and the new schedule actually means expanded customer service at centers. Centers will be open will be from 8 a.m. to 5 p.m. Monday through Friday, with some centers opening 30 minutes earlier or staying open 30 minutes later, based on volume. Labor Commissioner Michael Thurmond says an increasing number of jobless people are seeking services and it has become harder to serve them during a standard 40-hour work week.

Governor Perdue heads to Spain

Georgia Gov. Sonny Perdue is traveling to Spain for a weeklong economic development trip, even as he's asking state agencies to cut back on travel amid the state's budget crunch. Perdue's spokesman Bert Brantley did not immediately have a price tag for the taxpayer funded trip. But Brantley said that the state needs to continue marketing itself for the economy to recover. He said the governor is optimistic the trip will yield jobs and investment for Georgia. Perdue has called on state agencies to slash their budgets to meet an estimated $1.6 billion budget shortfall this year. As part of that he has asked them to halt nonessential travel.

(Associated Press)

Public defenders agree to slash spending

After threatening not to roll back expenses, Georgia's struggling public defenders are begrudgingly slashing the system's budget. Today's decision comes two weeks after leaders angrily defied Gov. Sonny Perdue's order to cut the program's budget by 6 percent. The public defender system, like most other state agencies, was ordered to propose cuts of at least 6 percent to help meet a $1.6 billion shortfall. But the system is in the midst of a sharp budget crisis, as its budget has been cut from $42 million to $35 million over the last three years.

Governor Perdue says lawmakers don't want special session to deal with budget crisis

Today's bleak economic forecast from a Georgia economist affirms tough times are ahead for state government.

State agencies and universities are making cuts, and they're hurting.

"People expect their government to live within their means, just the same way they do and thats' exactly what we'll do," says Governor Sonny Perdue. "We're going to deliver our services to people that need them and do that with minimal disruption. We're going to do more with less."

Perdue spoke to reporters after delivering a speech at a fundraiser in Augusta for U.S. Rep. Paul Broun (R-Athens) on Wednesday.

Perdue says despite the budget crunch, a special session to deal with the budget is unlikely. He says he's met with state House and Senate leaders, and that they're not ready to return to Atlanta.

Lawmakers reach '09 budget deal

From the Associated Press ...

Georgia lawmakers reached a deal on a $21.2 billion budget that boosts salaries for state employees and funnels money into schools on the chaotic final day of the legislative session. But an agreement on tax cuts was proving a bit more elusive today as weary legislators raced against the clock to consider hundreds of measures in the dying hours of the 40-day session. House Majority Leader Jerry Keen said, "I'm an eternal optimist. But I'm cautious." The impasse over tax cuts created a logjam for other high-profile measures, including a new fee to help the state's trauma centers and a sales tax hike to pay for transportation improvements. Republicans pledged to deliver tax relief this election year, but with a few hours left in the session's final day they remained sharply divided over how to do it. The House wanted to eliminate the car tag tax over two years. The Senate pitched a competing plan that would trim the state income tax by 10 percent over five years. Also up in the air were vast changes to the education system, drought-inspired measures to bolster Georgia's reservoir system and a proposal to allow Georgians to carry concealed weapons in more public places. The budget deal removes at least one contentious issue from the table, but both chambers won't get to vote on it until tonight.

Governor Perdue slashes budget

Governor Sonny Perdue is tightening the belt on State Government spending because of slowing growth in Georgia’s economy.

In February, state revenue grew only a half percentage point over last year’s figure. That’s not enough to meet the budget prediction for the rest of this and the next fiscal year.

In all, Perdue is estimating a shortfall of 310 million dollars through next summer.

"We see the economic clouds over the nation and I ‘m committed not to wait too long by tightening our belts."

Perdue’s bleak outlook comes in the midst of the legislative budget process. He wants to cut some new programs and is proposing that state employee and teachers raises be cut from 2 and half to 2 percent.

Perdue is ordering state agencies to cut out all non essential spending.

Georgia does have a record 1.5 billon dollar rainy day fund and Perdue says he’ll use it if necessary.

Governor Perdue unveils new budget

Today Governor Sonny Perdue unveiled his proposed budget for lawmakers to debate this legislative session. The governor wants $50 million to distribute to local governments to solve transportation problems. $30 million would be for buying undeveloped land for environmental protection. On the healthcare front, $53 million would go to reimbursing physicians and hospitals for uncompensated care, and $17 million would go to small businesses to start health insurance programs. The budget recommends giving the Georgia State Patrol an $9 million boost that would build three new trooper schools with a goal of graduating 205 new officers.

Perdue and some lawmakers make up

Gov. Sonny Perdue has extended an olive branch to lawmakers upset that he vetoed $142 million in the state budget. He met with the six budget negotiators Thursday.

"The governor and the legislature are working together to avoid the problems of the last session and make sure that we're focused on the future," says Senate Speaker Pro Tem Eric Johnson (R-Savannah), who attended the meeting.

Johnson says no one wants the next session—in an important election year—to be as bitter as this past one. It dragged on until late spring, when Perdue struck down many of lawmakers’ pet projects. He also told agencies to ignore lawmakers' instructions about spending their money.

Johnson says Perdue has promised to include lawmakers in upcoming budget talks. He dismissed the fight this year as a growing pain as Republicans get used to controlling both the legislature and the executive branch.

House Speaker Glenn Richardson was not at the meeting.

Republican leaders exchange written threats

A letter has renewed the budget battle between top state lawmakers and Gov. Sonny Perdue.

Six of the state's most powerful legislators—all Republicans—have sent a memo to state agency heads warning them not to stray from the budget passed by the General Assembly back in April.

That bill contained lawmaker's instructions on how agencies should spend their money. But Perdue told agencies to disregard it. He says the state constitution does not give lawmakers the authority to issue spending instructions.

In this memo, Sens. Eric Johnson (R-Savannah), Tommie Williams (R-Lyons), and Jack Hill (R-Reidsville), and Reps. Mark Burkhalter (R-Duluth), Jerry Keen (R-St. Simon's Island) and Ben Harbin (R-Evans) remind agencies that the General Assembly hold their purse strings, and will not hesitate to tighten them in January, when the legislature revisits the state budget.

Here is an excerpt from the memo:

You should be aware that any expenditure conflicting with the intent of the appropriation jeopardizes our confidence in your ability to act as a proper steward of public funds. In writing the 2008 Amended Budget, we reserve the option of reducing or eliminating funding for your agency by that amount.

Confused agency directors called Perdue's office. The governor shot back at lawmakers with his own letter.

An appropriation consists of (1) a recipient, (2) a purpose, and (3) an amount. Language beyond these three criteria is neither authorized by constitutional or statutory law, nor is it binding….In sum, it was within my authority to strike certain earmarks because the information language is not part of the appropriation.

In other words, Perdue says that he is sticking to his guns. But his spokesman, Burt Brantley, strikes a conciliatory note.

"We want to work issues out with the legislature," he says. "We do not want agencies to have to choose between one or the other. That is a tough position to be in."

Brantley says lawmakers know the governor is willing to work with them. Perdue ends his letter by saying that his door remains open.

Richardson admits anger got the best of him

House Speaker Glenn Richardson regrets getting angry during the budget battle a few months ago.

The already-heated debate took on a new tone when Richardson said that Governor Sonny Perdue was “showing his backside” by vetoing a supplemental budget bill and line-item deleting some budget items. Richardson tells the Savannah Morning News that while he shouldn’t have gotten so angry, if he did it again he still doesn’t know how he could stop himself.

Richardson says the legislature worked on the budget for four months, and that lawmakers were blindsided when Perdue announced he would call a special session to pass another budget. Richardson said he has apologized to Perdue for getting personal.

Perdue looks to smooth road at Capitol

Governor Sonny Perdue says he is extending an olive branch to House Speaker Glenn Richardson (R-Hiram).

"I think the misunderstanding over issues at the end of the session can be rectified," Perdue said. "We can restore a feeling of trust and relationship going forward because that’s what we must do."

Perdue angered Richardson and his leadership team by vetoing $140 million in projects lawmakers had put in the state budget. Perdue also told agencies to ignore lawmakers' instructions on spending money.

Perdue has invited lawmakers to speak with him about the budget. Rep. Earl Ehrhart (R-Powder Springs), who chairs the House Rules Committee, has likened such a meeting to "a lecture from daddy."

GOP lawmaker investigates Perdue budget decisions

An angry Republican state lawmaker has filed an open records request for information on Gov. Sonny Perdue's recent budget decisions.

Rep. Earl Ehrhart (R-Powder Springs), who chairs the powerful House Rules Committee, filed the request because, he says, the governor has overstepped his authority.

"You have an executive branch that just does not recognize the legislative branch's participation in the budget process," he says. "It's all their way or no way, and that's unfortunate."

This is another stage in the battle between House leaders and Perdue over spending instructions lawmakers tried to include in the 2008 budget. Perdue told state agencies to ignore the directions because they did not belong in the budget. He then called a meeting of the fiscal affairs committee, a special committee of legislative leaders, to shift around budget dollars.

Ehrhart says he has requested correspondence between the Office of Planning and Budget and five state agencies regarding the fiscal affairs committee.

Perdue has invited lawmakers with concerns over the budget to meet with him.

"I'll skip daddy's lecture," Ehrhart says. The meeting "would be a lecture from daddy on how we’re doing it wrong."

Perdue doubts lawmakers would call special session

Some state lawmakers want to call a special session to override Gov. Sonny Perdue's recent vetoes, but Perdue says he is not worried.

Republican leaders in the state legislature are angry that Perdue struck $140 million from the budget for the fiscal year that starts next month. Perdue also directed state agencies to ignore lawmakers' instructions over how to spend their money.

"This was an unusual session and emotions were fragile," Perdue says. "People may assume these were emotional decisions. They were not emotional decisions. They were decisions of process and methodology and principle that I'm happy to defend to anyone and I'd be happy to visit with any legislator about that."

Perdue says he doubts many lawmakers want to return to the Capitol this summer for something, he says, is not an "extreme situation."

Lawmakers who feel otherwise say it's their role to finalize a budget, and they want the ability to direct how agencies spend the money they appropriate.