Governor Not Counting on Federal Money

During budget hearings at the capitol today Governor Perdue said he went through his budget like a surgeon cutting out everything that's not needed. He says he is not banking on extra federal help to balance the budget.

"There's a lot of rumors out there now," he said, "but nobody is cutting any check."

Pedue says he doesn't have the money to fund the Homeowners tax relief grant which costs the state over $420 million each year. That means local governments may be forced to raise property taxes and homeowners could see their bills go up by $200 to $300 in some places. Perdue says he turned over every stone but couldn't find the money.

"If you can find a rock we haven't looked under," he told lawmakers, "then let's open it up together and I will rejoice with you."

Georgia faces a $2.2 billion budget shortfall this year and state economist Kenneth Heaghney warned lawmakers that things may not look up until later this year. He used words like skyrocketing unemployment, deteriorating labor market and sharply falling corporate growth, to describe Georgia's economy. Heaghney says Georgia, like the nation is in a deep recession.

"The average recession in the post World War II era is 10 months. We're already in it for 13," Heaghney testified before the joint house and senate appropriations committee.

Heaghney says the federal stimulus package and monetary policy on the federal level could help Georgia's economy later in the year. But he warned that any recovery would be weak.

Recession likely in Georgia

A recession is in the cards for Georgia according to the state fiscal economist. Kenneth Heaghney cited the housing slump, rising unemployment and a declining growth in tax receipts. However he downplayed fears an economic decline would last long. He says the economy could start to rebound later this year.