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January 12, 2004

House and Senate Briefed on Changes to FY 2004 Budget

Atlanta - Members of the Joint House and Senate Appropriations Committee were recently briefed on the Governor's proposed mid year adjustment to the current fiscal year 2004 budget.

"While the economy is beginning to show signs of life, it takes a while for private sector improvements to translate into increasing state revenues," said House Appropriations Chairman Rep. Tom Buck, D Columbus. "It's regrettable, but budget cuts will once again dominate this legislative session."

Although Georgia's economy has seen some modest growth over the first half of FY 2004, the state is unlikely to meet the Governor's revenue estimates set during the previous session. Governor Perdue has ordered all state agency heads to trim an additional 2.5 percent from their current operating budgets, with a 5 percent reduction likely to be mandated during FY 2005.

Having already reduced state spending by more than $1 billion since 2000, agencies are at a point where any reduction in expenditures will have a significant effect. The 2.5 percent reduction means that Georgia's schools will forfeit approximately $126 million in operating funds. That loss is partially tempered by an increase of $118 million for fast growth schools to account for increases in enrollment. The amended spending proposal also dedicates some $8.8 million which the Governor has set aside to help poorer rural schools through the equalization grant program.

Healthcare garners approximately 10 percent of total state spending, which means it also will feel the budget knife. The Governor has recommended a $1.6 million reduction in state grants to county health departments. The plan would also eliminate the adult emergency dental program at a savings of $1.3 million.

Children are always a priority in the General Assembly, and despite the cuts the Governor added an additional $17 million to the Peach Care for Kids program which provides affordable medical insurance for the children of working families who could not otherwise afford coverage. This money will ensure children currently enrolled in the program will continue to get the care they need.

Amid the difficult economic news Dr. Henry Thomassen, economic advisor to the Governor, did offer some comfort, saying Georgia's economy is on the mend, and that barring a major corporate scandal or terrorist attack, the state should begin to see the light at the end of the tunnel sometime during 2004.