Governor Perdue Submits Budget Meeting Georgia's Needs

Wednesday, January 15, 2003

Contact: Office of Communications 404-651-7774

Georgia Experiences Historic Revenue Decline

Atlanta - Governor Sonny Perdue presented his FY2004 budget recommendations and FY2003 Amended budget recommendations today to a joint session of Georgia's General Assembly. "Revenue shortfalls and an economy recovering from a recession dictate a fiscally responsible approach to allocating public resources. My budget recommendations reflect the challenging circumstances facing the state of Georgia and the nation. At the same time, my budget recommendations demonstrate a strong commitment to the people of Georgia - emphasizing a commitment to quality education, meeting the basic human needs of our state's citizens, and strengthening the state's economy," said Governor Perdue.</ br>

Commitment to Quality Education

"Georgia is a state that understands investment in education is the cornerstone of economic development and our future quality of life. We cannot afford to shortchange the children of our state or those who seek a higher education," said Governor Perdue. Providing further explanation of his view of education as an investment, he added: "We cannot expect our economy to grow stronger if we do not invest in producing educated minds." Governor Perdue's 2004 budget recommends allocating $8.8 billion, or 55% of the total budget, for education. These recommendations include:

• $1.1 million for additional funds to provide the 10% salary supplement for the 380 teachers who achieved National Board Certification in 2002, and $2.3 million in FY2004 to fund the supplement for Georgia's more than 800 National Board Certified teachers.
• $186 million in bonds for school construction and $250 million for Georgia's voluntary Pre-Kindergarten Program.
• Support of the HOPE Scholarship program by providing $373 million for tuition and other expenses for eligible students in fiscal 2003.
• $81 million in university system formula funding to reflect increased enrollment and $28 million in bonds for major capital outlay projects on our university campuses.

Commitment To Georgia's Families, Children and Health

"Georgia is also a state that believes in family and children and meeting the most basic human needs of our citizens," said Governor Perdue. The 2004 budget recommends allocating approximately $3.7 billion, or 23% of the total budget, to address Georgia's basic needs, including critical areas such as childcare, healthcare, medical research, and care for seniors.

• $9.4 million to provide additional funds for Specialized Foster Care services and $5.8 million to add 125 new Child Protective Services positions.
• $579,000 to double the annual clothing allowance for each child, representing the state's first increase since 1975.
• $825,000 to identify and recruit new foster and adoptive parents.
• $1.7 billion for the state's portion of Medicaid.
• $8.6 million to continue construction of the Cancer Research Center at the Medical College of Georgia. $36.6 million in private and federal funds have been identified to provide additional support for this project.
• $3.2 million to provide community-based residential care for those citizens currently in nursing homes.

Commitment To Strengthening Georgia's Economy

"What else can we say about Georgia?" asked Governor Perdue. He responded by describing Georgia as "a state eager for prosperity and optimistic about our prospects for economic growth, even in tough times." The Governor's budget recommendations focused on programs and initiatives designed to foster economic growth and create jobs for hard-working Georgians, including:

• $52.1 million in tobacco settlement funds for the One Georgia Authority to continue grant and loan programs targeted at the most economically challenged counties.
• $100 million for the Governor's Road Improvement Program (GRIP).
• $16.1 million in the FY 2003 amended and $77.2 million in the FY 2004 budget in state funds, bonds and Port Authority debt reduction for support of a major economic development project in Pooler, Georgia (Chatham County) that will create 3,300 new jobs.

Budget Recommendations Also Support Key Projects Throughout The State

Other major projects around the state of Georgia recommended for funds include:

• Increased funding to the GRTA to support the expanded operations of the Clayton County Transit system and to qualify for matching federal funds.
• Funding for the state's Family Connection program in Camden, Decatur, Early, Schley, and Worth counties.
• $20,495,000 for a library addition at Georgia Southern University.
• Funding for correctional facilities, including the Valdosta Diversion Center ($775,061), Bleckley Parole Revocation Center ($1,128,094), Appling Parole Revocation Center ($1,128,094), and DeKalb Transitional Center ($1,132,751).
• Provide ABE formula grants to the state charter school in Bulloch County.

Funding "Essentials" Requires Difficult Choices

"We must resist any temptation to mortgage our future, and our children's future, to deal with the challenges on our watch," said Governor Perdue. "Those values will shine through in our budget. These are the essentials we cannot do without, in good times or lean. But to fund them we must make hard choices," he added. With revenue shortfalls critically impacting the state's budget, all programs, including those historically funded by budget surpluses, received a hard look. During his address, the Governor also emphasized the importance of maintaining the state's excellent bond ratings. "As good stewards of the public purse, I believe we must maintain Georgia's sterling reputation in the financial markets and protect our bond rating. We maintain that AAA rating by not taking on more debt than we can handle," said Governor Perdue. "Maintaining our AAA bond rating is important because it gives us a better interest rate when we do borrow money and saves our state millions of dollars," he added. Consistent with the commitment to maintain the state's AAA bond rating (the highest rating given by credit agencies), the Governor's budget recommendations identified a number of measures to maintain increase state revenue, including:

• Modest and temporary increases in taxes on cigarettes and alcohol. This measure is expected to generate approximately $91.5 million and $387 million in new revenue in FY2003 and FY2004, respectively. These temporary revenue increase measures will sunset in four years.
• Roll back of the Homeowner Tax Relief Grant, commonly referred to as the "homeowner exemption." These exemptions will be fully funded for FY2003 and partially funded in FY2004. This program is scheduled for a re-design to more closely reflect a more fiscally sound funding model.
• Discontinuation of the discount on driver's license fees for organ donors. Eliminating the fee break is projected to generate $4.4 million in additional revenues.

Governor Challenges State Legislators To Develop Budget That Keeps Georgia Strong

Governor Perdue summarized by describing his budget recommendations as "lean" and having "no fat." He added that the state was "on a diet, and a pretty strict one." He also encouraged partnership by reminding Georgia's legislators that they were "members of the same team, Georgia's team" and promised to listen to any recommendations that allowed the state to meet its obligations to "the educational, economic and human needs of our citizens."