When the last fiscal year closed in June, Georgia state government was forced to tap its reserve fund to the tune of $600 million to cover all the expenses for the year. In June, state tax collections had dropped 9.4 percent from June 2007 and collections for fiscal year 2008 were down 1.1 percent.
That makes the $700 million in new spending the General Assembly approved awfully iffy, especially since Gov. Sonny Perdue has fired a shot across the funding bow of state agencies. The governor has ordered most of them to plan for a 3.5 percent spending cut.
Among the impacts implementing these cuts would have are the elimination of new state jobs, at least a delay in $150 million in state tax cuts and postponement of pay raises for 200,000 teachers and state employees.
This, understandably, is causing some cringing, especially among the state’s colleges and universities where budget cuts translate pretty much into one thing — fewer people to teach an ever increasing number of students.
That means tighter class scheduling since there would be fewer full-time instructors and more students packed into the classes that are offered.
But the University System appears to be taking the smart approach here. Chancellor Erroll Davis is requiring campuses to submit plans not at a 3.5 percent reduction, but a deeper 5 percent cut.
That’s prudent planning because some projections show the state budget falling shorter than the $300 million Perdue’s directive would cover. One estimate has a fiscal year 2009 shortfall of $2 billion, nearly seven times worse. There’s even talk of convening a special session of the Legislature to make spending cuts.
The Board of Regents will review the university spending cuts late next month and send the plan to the governor. Unless a spending crisis hits the state, the Legislature will probably wait until its 2009 session to look at slicing into the spending.
Perhaps it won’t come to that. With any luck, Georgia’s historically resilient economy will bounce back even before the U.S. economy does. With a lot of luck, it will happen soon.
But it’s better to plan for harsh reality than to hold out for a winning ticket on the economic lottery and then scramble when the right numbers didn’t come in.
State officials are doing the right thing by preparing for the worst and hoping for the best. Sharpening an ax is a lost less painful if you never have to swing it.
— The Albany Herald Editorial Board