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State Budget Crisis Nowhere Near Over
The Times-Herald
Tuesday, October 27, 2009
By Jeff Bishop
State Senator Mitch Seabaugh (R-Sharpsburg) told a Newnan-Coweta Chamber of Commerce committee Monday afternoon that the state budget crisis is still nowhere near being over, in spite of all the recent talk about the nation coming out of the recession.
He said a recent caucus retreat was devoted to examining continued revenue shortfalls and discussing new rounds of budget cuts.
"I found the information very disturbing," said Seabaugh. "I'm going to need your help."
He said the actual revenues of the first few months of FY 2010 are down significantly from projections.
"We are already 14.24 percent below what the estimates for the budget said," said Seabaugh.
Governor Sonny Perdue built his budget around the assumption that revenues would rise 1.9 percent in FY 2010, said Seabaugh.
"More than likely we are not going to make that," he said. "So that's probably another half a million dollars we'll have to cut out of the 2010 budget when we go back in January."
And the U.S. government may not be able to provide much help as debt consumes more and more of the nation's gross domestic product (GDP), he said. By 2012, debt may account for as much as 70 percent of GDP, Seabaugh said.
Unemployment continues to be in the double digits, and that's a trend that will likely continue for months, he said.
"Almost certainly we will have another couple of months of significant decline before we catch up," Seabaugh said.
He said that while Georgia has recently suffered a 24 percent cut in revenues, it's still not in as much trouble as California, which had a $45 billion shortfall, or Illinois, which passed a budget that only covered half a fiscal year.
In 2009 Georgia legislators had to cut $1.2 billion from the budget, and more cuts are coming -- especially now that the reserves have been significantly depleted, he said.
Seabaugh predicts that about $573 million total will have to be excised from the 2010 budget.
In 2011, about "one billion dollars of additional cuts will have to be made," he said.
"By 2012, we won't have any reserves, whatsoever," he said.
Seabaugh said that since projections are showing that even more cuts will have to be made in 2012, those cuts should be made now.
"I'm going to be honest with you. This is what I told the caucus," he said. "If we're going to cut another one billion in 2012, we really need to go ahead and cut it here."
Seabaugh said his primary interest is to get ideas from his constituents about how businesses can be spared government regulation so that more new jobs can be created.
"What is the state government doing that's having a negative impact on job creation?" he asked chamber members.
"I want to do what makes sense," he said.
"We have the opportunity now to identify what the state should be doing, fundamentally, and get the government out of the rest," he said. "If it's important, then the private sector will find a way to meet those needs, and they will do it more efficiently."
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CAPITOL OFFICE