January might be cruelest month

It might be pretty ugly under the Gold Dome in January.

While the 2010 session of the General Assembly is still nearly three months from starting, it may not be too early to start worrying over the tough decisions that will be waiting for the legislators when they get there.

Mostly, it's worrying about money. There's not many problems facing Georgia that a nice boost in revenue wouldn't relieve.

Unfortunately, it doesn't appear that revenues are going to jump anytime soon. Looking at Georgia tax receipts for the first quarter, the decline for the first three months of Fiscal Year 2010 compared to the first three months of FY '09 has been a 14 percent drop, including year-to-year drops of 16 percent in August and September. Meanwhile, Georgia's unemployment rate is hanging steady at 10.1 percent and more foreclosures hit the papers every day, especially in the metro Atlanta area.

There are signs of recovery taking hold. Leading economic indicators were up 1 percent last month, beating expectations by 0.2 percent and more than doubling the 0.4 percent growth in August, and Wal-Mart said Thursday it expects sales to pick up 1-2 percent the rest of this year and then 4-6 percent in 2010. The Dow Jones has been hanging in above the 10,000 mark for a few days now, and many of the companies that make up that index are giving positive reports that exceed Wall Street expectations.

But the harsh reality is that regardless of how fast the recovery goes, the jobs recovery -- if it ever does return to pre-recession levels -- will take a while longer and the taxes that government operates on also will take longer to build back up.

"It's been a tough, tough time," state School Superintendent Kathy Cox, a former legislator, noted Thursday while meeting with The Albany Herald Editorial Board.

She said the pain has been felt acutely in the educational system, especially in the Atlanta areas. With property there under foreclosure, there are fewer people to pay property tax, hurting revenue.

The pain in education, she said, would have been worse than what has been experienced had it not been for the federal stimulus money the state received. Though educators, like everyone else in state government, have had to take financial hits from furlough days, 8,000 education jobs were saved by the stimulus funds.

That's 8,000 Georgians who are not out of work today.

"I don't think that people know it (the impact of the stimulus money) was that significant," Cox said.

But education -- and every other state service -- again will be under the financial microscope in January when the Legislature is back in session. In the past, the midyear budget adjustment was something various agencies looked forward to. Invariably, the state's economy grew during the year and more funds were available to dole out.

This fiscal year, however, it's a case of holding your breath and hoping there won't be more reductions.

Cox says that she'll work to keep teachers from having to take even deeper cuts. It won't be an easy task.

"It's going to be a tough session," she said.

Indeed. The state is at a crossroads that doesn't have an appealing avenue. The choices appear to be cut more or raise taxes.

With a Republican-dominated government in an election year, the guess here is that axes are already being sharpened.