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)

Georgia Tax Revenues Way Down

Governor Sonny Perdue says revenue figures for June dropped 16 percent from the same month last year. June ends the fiscal year—the overall decline is 10.5 percent.

The news threatens to leave state reserves dangerously low. A spokesperson for the governor says when the books are closed in the next few weeks Perdue will likely have to transfer $350 million from the state’s rainy day fund to cover the budget shortfall.

Worsening revenues have forced state agencies to make substantial budget cuts already and to furlough workers. The governor has suggested agencies set aside 3 percent of their July budget to prepare for more cuts.

(The Atlanta Journal Constitution)

June State Revenues Down

Gov. Sonny Perdue says net revenue collections for the month of June dropped by 15.7 percent from the same month a year ago. The governor says that for the fiscal year, the decline was 10.5 percent. Figures released by the governor's office show revenues for last month of $1,364,350,000 compared with 1,618,879,000 for June 2008, a decrease of more than $250 million. Declines were seen in collections from income tax, sales tax and motor fuel tax. Worsening revenues have forced state agencies to make substantial budget cuts and to furlough workers.

(Associated Press)

New Fiscal Year Continues Budget Pain

Governor Sonny Perdue warns of more pain as the state flips the page into a new fiscal year today. The continued weak revenue stream forced constant cuts to the budget through fiscal 2009. Now for the new month, Perdue has already asked state agencies to voluntarily cut spending by another 3-percent.

Now into fiscal 2010, Perdue says moving forward the operative phrase is "right-sizing expenditures.":

"The budget act gives the Governor the right to withhold allotments to meet up with revenue expectations. I'm going to meet with Legislative leadership after the end of the year and determine if we want to take that route or if they would like to come back for a special session where we readjust the budget."

Concerning the end of fiscal 2009, Perdue earlier had mentioned the possibility to perhaps tap the state's rainy day fund for up to $400 million to make ends meet.

Perdue Asks For More Budget Cuts In July

Governor Sonny Perdue is calling on state agencies to continue tightening their belts into the next fiscal year.

State revenue numbers are not expected to show much—if any—improvement into July. Because of that, Perdue spokesman Bert Brantley says a letter sent to agencies today is asking for voluntary cutbacks in budgets next month:

"The check they receive so to speak from the state for their July operations will be the full amount. We’re just asking them to continue doing the things they’ve been doing...hold back spending where possible. The hope is we will achieve a 3-percent reduction in July."

Brantley says in order to balance the end of this fiscal year, officials may have to tap up to $400-million of the state’s rainy day funds. That would leave little into going into fiscal 2010.

He says additional state budget cuts through 2010 are likely.

Judge Says Budget Cuts Could Deny Justice

The state's next top chief justice is warning that more budget cuts to the judicial branch would mean more delays in an array of legal cases. Justice Carol Hunstein said Tuesday it is crucial for the courts to have the financial resources to operate efficiently. Hunstein said the adage "justice delayed is justice denied" is apt. She said justice is being denied to some residents because of the sharp budget cuts. Hunstein takes over as Georgia's top judge on July 1. Chief Justice Leah Ward Sears is stepping down at the end of this month.

(Associated Press)

Barrow County Starts Layoffs

Barrow County has laid off 18 employees this week. The county cut the workers Monday and Tuesday as part of plans to deal with a $5 million budget shortfall. Three other employees took early retirement. The jobs ranged from the fire department to the tax commissioner's office. The county has cut other expenses since the shortfall was announced in January, but it still faces a $1.6 million deficit. Cuts include eliminating holiday pay, salary reductions and a hiring freeze. Barrow County is northeast of Atlanta. It has about 400 workers.

(Associated Press)

State Ed Officials Work To Save Disabled Sports Program

Georgia education officials hope to save a sports program for disabled students funded by the state. Officials say there is a stopgap plan in-place to keep the American Association of Adapted Sports Programs running in Georgia schools. The non-profit based in Atlanta helps to provide handball, basketball and football games for about 500 state families with disabled athletes. Problems arose when funding for the programs fell victim to the budget ax, with 20-percent in cuts hitting education and other departments. Now, officials expect the program to get a little over $200,000, compared to the typical $700,000.

State Revenue Numbers Continue Tumble

The state’s revenue numbers continue to struggle. The Governor’s office says collections for May were down more than $200 million, or 14.4%, from the same month a year ago. Bert Brantley is spokesman for Governor Perdue:

"It’s all relative...14.4% down is better than 20% down, but it’s not as good as 0% down or even an increase. This is the reason why we’ve had to cut spending...this is the reason why we’ve had additional cuts even since the Legislature has come in."

For the fiscal year set to end June 30th, collections are down 10-percent. Because of that, the state’s reserves are being tapped to make up the difference.

Meanwhile, state agencies remain under an order from Perdue to cut spending this month by 25% in order to meet a balanced budget.

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.

State Judges To Meet on Budget Cuts

A group of state court judges has called an emergency meeting for Friday following news of a proposed budget cut.

The Judicial Council of Georgia – headed by Supreme Court Justice Leah Ward Sears -- called the meeting after Governor Perdue announced an across the board twenty five percent budget reduction for this month only.

The group will decide if it should sue the Governor, questioning if he has authority to cut funding to another branch of government.

Fulton County Superior Court Judge Melvin K. Westmoreland says the Governor made his decision without speaking first to the state’s judges.

"It was just unilateral. The Governor informed OPB that 25 percent needed to be cut across the board. There was no determination made that public safety is something that is more important to the citizens of Georgia than tourism."

Westmoreland added that any loss of money could mean furloughs for the state's public defenders and staff.

"That one million dollars that would come to the Council of Superior Court Judges may not be a lot in respect to the budget crisis. But it certainly means a great deal to the judges and their staff. That million is the million that pays the salaries of our support staff and without those support staff, we will not be able to conduct court."

Georgia is running out of money as the state tries to balance its books for the fiscal year which ends June 30^th.

If the Judicial Council of Georgia moves forward in a lawsuit against Perdue, the case automatically goes to the Georgia Supreme Court, lead by Chief Justice Sears, who says she will excuse herself.

Budget Cuts Could Mean Lawsuit for Perdue

The state's courts could become the latest victims of the down economy. Governor Sonny Perdue is slashing state spending by 25% this month, because tax revenues are down. This latest round of budget cuts follows those ordered earlier this year by the Governor that all state agencies slash the bottom line up to ten percent. In his most recent call for departments to dig even deeper, the Governor included the state's courts.

However, Supreme Court Chief Justice Leah Ward Sears questions whether the Governor has that budget authority over the judicial branch.

"There is this question of power. The issue is whether or not the executive branch and the executive can change our budget. The judicial branch of government is not a state agency. We are a third branch. And that makes it a constitutional issue."

Later this week, the 202-member Council of Superior Court Judges will decide if it will ask the Chief Judge to sue Governor Perdue over the proposed cuts. It's a step the state's top judge hopes to avoid.

"This doesn't have to be hot headed. It doesn't have to be nasty. It's just a question that we need answered."

In the meantime, Fulton County Superior Court Judge Melvin K. Westmoreland fears if the court's are ordered to furlough employees, it would leave the state open to lawsuits from defendants, claiming violation of constitutional rights.

"It's a significant concern. We will not be able to keep the court's open and if we can't try that case because we don't have a district attorney or a public defender in front of us, than that defendant will be released."

The Governor wrote the Chief Justice, saying that after consulting with the fiscal officer of the state attorney general's office, he believes he has the power to withhold money from any state agency, including the two other branches of state government.

Bert Brantley is the Governor's spokesperson.

"There is a constitutional responsibility to balance the budget. And, then there's a statutory authority that the governor has to withhold spending from agencies in tines of sharp revenue decline. That statutory authority says that the withholding has to be equal."

Georgia and its courts, just like states and courts around the nations are all facing tough economic decisions. Including the nation's highest court. Here's US Supreme Court Justice Clarence Thomas testifying before a joint US House Senate subcommittee on finance.

"We recognize that in these difficult times, all budgets are to be looked at in a very disciplined way and we have done that. In the years that I have appeared before you, we have always requested only what is necessary for the court's operations. And, it is no different this year."

Although the US government can roll over its budget deficit from one fiscal year to the next, Georgia is constitutionally obligated to produce a balanced budget each fiscal year.

Budget Cuts Threaten Superior Courts

Leaders of Georgia's judicial branch are arguing it should be exempt from deep cuts ordered this week by Gov. Sonny Perdue. The Council of Superior Courts said Friday that it should be immune from Gov. Sonny Perdue's decision to slash the funding for state agencies by 25 percent in June amid falling tax collections. Georgia Supreme Court Chief Justice Leah Ward Sears called such a move "unconstitutional" in a letter she sent Thursday to Perdue. Fulton County Superior Court Judge Melvin Westmoreland, who is the council's president, warned state budget officials that such a move could shut down superior courts across the state for two weeks.

(Associated Press)

Perdue Slashes State Budget -- Again

Georgia's state agencies will get about 25 percent less money in June so the state can balance its budget for the year. Governor Perdue lowered the budget estimate for the fiscal year by 247 million dollars. Education will not be effected by the cuts. Instead, the state will use stimulus money intended for 2011 to fill the gap. Bert Brantley is Governor Perdue's spokesperson.

"This is the fourth time that we've reduced the 2009 revenue estimates. As you can see, it's been a really unprecedented economic time. The hit to revenues has been tough and has been the pit that we weren't fully expecting. We had projected certainly a dip but not to this level."

Brantley says most state agencies have been preparing for the cuts already. Governor Perdue sent a letter to state lawmakers to inform them of the cuts as Georgia continues to grapple with plummeting tax collections. The Governor lowered the amount the state may spend to keep from running over budget for the fiscal year set to conclude June 30.

$30-M In Stimulus For Public Safety In GA

Georgia law enforcement is getting an infusion of more than $36-million in federal stimulus dollars to help boost state and local public safety programs. Officials with Georgia’s Criminal Justice Coordinating Council say the money will go to victim and witness assistance programs that have been hit hard by budget cuts. The money is designed to shore up public safety programs while spurring job creation and retention. Attorney General Eric Holder says the cash will address Georgia's economic challenges while also meeting the state's public safety priorities.

Perdue Signs FY 10 Budget

Governor Sonny Perdue signed the state budget for fiscal year 2010 on Wednesday. It's two point five billion dollars less than the previous budget.

Perdue calls this 18.6 billion dollar budget a "thoughtful and conservative way to ensure Georgians are receiving value for their tax dollars." Some 23 million dollars will go towards trauma care funding, with cuts to Medicaid and education spending dampened by federal stimulus dollars. Perdue also used his line item veto to axe three minor projects totalling less than two hundred thousand dollars.

Meanwhile, state tax revenues are still down, with the April numbers showing a more than twenty percent drop off from the previous year. Furloughs for state employees are likely to continue, with about twenty five thousand state workers already taking some unpaid furlough days.

Perdue Set To Sign '10 Budget

Today is the deadline for Governor Sonny Perdue to sign or veto legislation still on his desk from the General Assembly session. The biggest item remaining is the new $18.6 billion budget for the state. The blueprint for the next fiscal year includes deep cuts at state agencies, and using federal stimulus money to prop-up Medicaid and education.

But in the big picture, the just-released bad revenue numbers from April don’t bode well for fiscal 2010. State Senator Jack Hill is the Senate Appropriations Chair.

"We’re still not only in danger of not making revenue estimate for this year but we’re now under revenue estimate for 2010 which starts in July and there’s a whole set of problems that creates."

Senator Hill says if the trend doesn’t radically change over the next two months, the state would likely have to use up the $560 million in rainy day funds. Lawmakers then would have to rework the 2010 budget with two options in mind--call a special session to move more stimulus funds from 2011 back into the 2010 budget, or take a hard look at state government and do more cutting.

Public Defenders May Call for Gov Help

Officials with Georgia’s public defender system say they may need Governor Perdue to call a special panel to help them deal with deep budget cuts. System leaders say a gathering of the Fiscal Affairs Committee may be the best chance at this point to help them cope with the situation. The state-funded public defender system is facing lagging support from state legislators and mounting funding problems amid the economic downturn. It was also slapped with a lawsuit last month that seeks to halt prosecutions in hundreds of northeast Georgia cases until lawyers are provided to represent the defendants.

GBPI: Tax Cuts Mean Service Cuts

A new report released Monday shows proposed tax cuts would cost Georgia some 1.5 billion dollars over the next five years.

The report comes from the Georgia Budget and Policy Institute, an organization that looks at how state spending impacts government services. The group is concerned
about a pair of legislative bills that would give companies that hire out of work employees a 2400 dollar tax credit and cut the capital gains tax in half.

Conservative lawmakers who designed this plan say it would create at least two thousand jobs in the state. It's now on the Governor's desk waiting for his approval. GBPI's Allen Essig says the Governor needs to continue "being a responsible budget Governor. If he signs these bills, it will guarantee the state will have untennable deficits in the future."

Essig says that would mean a reduction in education, road and health care funding. Governor Sonny Perdue has not indicated what action he will take. The Governor's press office did not return calls for comment.

Regents to vote on tuition hike

The Georgia Board of Regents is expected to vote on how much to raise tuition in the face of the state's worst fiscal crisis in decades, including a measure to suspend guaranteed tuition rates for students. The board will meet Tuesday to vote on whether to do away with the "fixed for four" tuition plan temporarily, raising tuition and fees for all students to make up for $238 million in state budget cuts this year and $275 million next year. That's about 10 percent of the state funding allotted for Georgia's 35 colleges anduniversities. Under the tuition plan launched by Governor Sonny Perdue in 2006, students are guaranteed the same fee rate for four years. The fixedr ate is contingent on colleges getting the funding they need to cover costs.

(Associated Press)