ATLANTA – The Georgia Senate passed a state budget Friday slashing spending by $2.6 billion over the objections of Democrats who argued majority Republicans could have avoided some of the cuts by raising revenues.
The scaled-back fiscal 2021 budget, which passed 34-15 along party lines, is the product of Georgia’s response to the coronavirus pandemic, which drove up costs across many state agencies while sending tax revenue plummeting.
“We could not foresee the overnight impact of COVID-19,” Senate Appropriations Committee Chairman Blake Tillery, R-Vidalia, said at the beginning of Friday’s floor debate on the budget.
Initially, Gov. Brian Kemp and legislative leaders instructed the agencies to reduce their spending by 14% but later amended that to 11% after receiving a slightly better tax revenue report for May than the 36% drop-off that occurred in April.
“You don’t reduce funds by 11% without affecting every budget in every corner of our state,” Tillery said.
Tillery highlighted some steps Senate budget writers were able to take to mitigate the impact of the budget cuts, including restoring funding to Georgia’s pre-kindergarten program, reducing employee furloughs from up to 24 days to 12 and redirecting leftover federal funds into state programs.
“I know this is not the budget many of you expected to or hoped to have this year,” Tillery told his Senate colleagues. “[But it] prioritizes the items we care about most.”
But Democrats complained the spending cuts still would inflict severe damage to Georgians, particularly health-care needs the pandemic has made even more acute, and to the state’s workforce. Among other things, initiatives to provide targeted pay raises to employees in agencies with the highest turnover have been zeroed out of the budget.
Senate Minority Leader Steve Henson, D-Stone Mountain, said coronavirus is only partly to blame for the fiscal hole the state finds itself in. Legislative Republicans helped create a revenue shortfall by cutting the state income tax rate two years ago and doling out tax breaks to special interests.
“We have made tax and policy decisions that undermine the future of this state,” Henson said. “We can and should do better.”
Other Democratic senators criticized Republicans for refusing to consider proposals to raise revenues, including increasing Georgia’s tobacco tax – third-lowest in the nation – and drawing down federal health-care dollars by expanding Medicaid coverage under the Affordable Care Act.
“There are a number of ways we can expand our revenues and not have to make these draconian cuts,” said Sen. Nan Orrock, D-Atlanta.
Senate Finance Committee Chairman Chuck Hufstetler said his committee is working on one potential revenue raiser. The panel has targeted for elimination a list of tax breaks the state currently offers as inducements to attract new businesses and create jobs, folding them into a bill headed for the Senate floor.
“There’s potentially millions of dollars there,” said Hufstetler, R-Rome.
While getting rid of tax breaks might appeal to Democrats looking for more revenue, Georgia businesses are gearing up to defend them. The Georgia Chamber of Commerce and Georgia Economic Developers Association released a statement Friday opposing House Bill 1035.
“We must remember that businesses in Georgia have just started to reopen after a government-mandated lockdown, and we are now suffering in a recession with record unemployment,” the statement read. “Our economic development community needs every tool possible to lead this recovery.”
Meanwhile, the fiscal 2021 budget likely won’t be finalized until the last day or two of this year’s legislative session. The House passed a much larger pre-coronavirus spending plan in March before lawmakers took a three-month hiatus to discourage the spread of COVID-19.
A joint House-Senate conference committee will work during the next week to settle the two chambers’ differences over the budget.