ATLANTA – Georgia House Speaker David Ralston has warned his legislative colleagues repeatedly this month the need for painful spending cuts means the 2020 General Assembly session likely will last longer than usual.
Three days of hearings Jan. 21-23 on Gov. Brian Kemp’s proposed mid-year budget adjustments for this fiscal year and his $28.1 billion fiscal 2021 budget plan dramatically demonstrated Ralston’s point.
One after another, state agency heads painted a bleak picture of what across-the-board budget cuts Kemp is recommending to offset sluggish state tax collections would do to programs and services under their jurisdiction.
“Many budget cuts will have debilitating effects on services, especially in rural communities,” said Taifa Smith Butler, president and CEO of the Georgia Budget and Policy Institute, an Atlanta-based public policy nonprofit.
With state revenues growing much slower than projected during the past year and actually declining in some months, Kemp ordered state agencies last summer to reduce spending by 4% during the current fiscal year and 6% in fiscal 2021, beginning July 1.
Department heads submitted more than $210 million in cuts in their mid-year budgets and another $300 million in reductions for fiscal 2021.
Some agency heads told members of the Georgia House and Senate Appropriations committees last week they could hit those targets without hurting programs and services by not filling vacant positions, eliminating most travel and through various efficiencies.
But others said the first mandatory spending cuts in state government since the Great Recession would deprive Georgians of vital services, particularly low-income families and people suffering from mental illness.
“What it takes us to is that need to take cuts in painful places,” said Commissioner Judy Fitzgerald, who oversees state mental health services at the Department of Behavioral Health and Developmental Disabilities. “The safety net is stretched to the max.”
While some of the budget austerity results from slower economic growth in Georgia, a major culprit is the tax cut the General Assembly passed two years ago. Lawmakers reduced the state’s income tax rate for the first time since 1937 from 6% to 5.75%.
Then-Gov. Nathan Deal steered the tax cut through the legislature to make sure taxpayers received the benefit of a revenue windfall the state was expecting as a result of the federal tax reforms Congress passed late in 2017.
The 2018 bill called for a two-part tax cut, with lawmakers due to vote this year whether to roll back the income tax rate again to 5.5%.
But Kemp has been cool to the idea, citing the tight budget climate. Passing the second phase of the tax cut this year would cost about $500 million.
Senate Finance Committee Chairman Chuck Hufstetler, said the state can’t afford that kind of revenue hit this year.
“We’re looking at some severe budget cuts,” Hufstetler said Friday. “I don’t see the math there right now.”
Lawmakers would be “wise to look before they leap” when considering cuts to sensitive programs like accountability courts and mental health, said Kyle Wingfield, president of the conservative Georgia Public Policy Foundation.
But keeping those programs funded should not be done by raising taxes, he said, especially as Georgia’s economy rebounds from hurricane-caused crop losses in 2018 and easing trade tensions with China.
“This is an economy that’s running really fast right now,” Wingfield said. “It would be better to trim back where we can in the short term than to raise taxes.”
Nearly $9 million would be pulled from several programs aimed at training doctors to help close a severe physician shortage in Georgia, particularly in rural areas.
That caught the attention of several influential Republican lawmakers, including Senate Appropriations Committee Chairman Jack Hill. He noted the legislature singled out those programs in recent years to receive more money, not less.
“It was obvious that the cuts focused on new money, on things that had been put into practice recently,” said Hill, R-Reidsville. “For them to cut those out in the beginning, it certainly got the attention of folks in the rural areas.”
County health agencies would lose out on roughly $17.5 million in cuts to grants funded by the Department of Public Health, which Director Kathleen Toomey said might be covered by other sources like private and federal grants. But many lawmakers worry counties could still suffer.
“Some of these counties have a difficult time keeping their lights on,” said Rep. Clay Pirkle, R-Ashburn. “Cuts of this magnitude to our county health departments will be difficult.”
Officials also said cuts of about $80 million for mental health programs would force more money to be pumped into handling crisis emergency health situations instead of working to prevent them.
Other reductions between $80 million and $100 million would affect the state’s prisons, courts, police and public-defender agencies.
Particularly troubling for criminal justice advocates are proposed cuts of about $3.5 million to the state’s accountability courts, a popular program created under Deal that provides alternative sentencing for thousands of inmates.
“These cuts symbolize a big step backward,” said Sarah Totonchi, executive director of the nonprofit Southern Center for Human Rights. “I’m deeply concerned about the short-sighted approach toward criminal justice.”
Amid concerns, many lawmakers praised the agencies for homing in on non-personnel spending cuts like eliminating vacant staff positions and upgrading technology. Those sorts of cuts were what Kemp called on agencies to make shortly after ordering reductions last summer.
“Overall, I’ve heard a lot about smart things the departments have done to reduce waste,” said Sen. Brian Strickland, R-McDonough, one of the governor’s floor leaders. “It’s a good exercise.”
Kemp’s office pushed back on criticism of some of the cuts. Candice Broce, a spokeswoman for the governor, noted the cuts were presented after state budgeting staff “conducted an in-depth, comprehensive analysis of every agency’s budget submission.”
Meanwhile, budget veterans stressed that it’s still early in the process. The state’s longest-serving lawmaker, Rep. Calvin Smyre, said the trick will be to make cuts that steer clear of affecting everyday Georgians.
With luck, state revenues will climb back up and perhaps many of the cuts won’t be needed, he said.
“I think a lot of these things will take care of themselves,” said Smyre, D-Columbus. “I’d just like to continue to look at it in a very responsible manner as we go along.”