An edict from Gov. Brian Kemp will prevent Georgia lawmakers from officially weighing in anytime soon on cuts to this year’s state budget that will affect more than half of the current year’s spending plan.
It’s a decision that shows the governor’s muscle, but also likely puts him at odds with powerful members of his own party.
As late as Thursday morning, key lawmakers said they were still hoping to meet with department directors in late September to go over Kemp’s mandated budget reductions. Today was the deadline for state department heads to submit proposals that cut 4% from the 2020 state budget that started July 1, with the reductions taking effect next month if lawmakers sign off on the changes next year.
However, that changed after the governor not only told directors to stay away from those meetings, but also sent a memo saying legislators should not get the spending plans until next year’s legislative session begins in January, the Atlanta Journal-Constitution reported Thursday afternoon.
This year’s budget originated in the state House of Representatives last winter and was crafted by lawmakers at the governor’s direction. The governor pushed for it to include $3,000 pay raises for teachers, added a $120 million merit raise for state employees and he toured the state to publicly sign it in May.
In August, a month after this year’s budget took effect he ordered department heads to cut their spending by 4% this year and another 6% reduction next year.
Legislators will still get a say in next year’s legislative session as the House originates amendments to this year’s budget and the spending plan for the next full year.
The governor traditionally unveils a new annual state spending plan in January at the outset of the new legislative session.
House Appropriations Chairman Terry England was among those who were optimistic early Thursday that lawmakers would get more clarity about proposed spending cuts in the coming days.
But the Auburn Republican declined late Thursday afternoon to comment on the news of Kemp’s memo.
And Wednesday, Moultrie Republican Sam Watson, who oversees general government agency budgets in the House, said the cuts make it more important for lawmakers to hear from department heads earlier than usual – before the chaos of a jam-packed legislative session.
The budget process normally plays out starting in January as legislative committees hear bills and constituents come to the state Capitol to meet with their lawmakers.
“As long as things are good, that’s OK being in time crunch,” Watson said Wednesday. “Having meetings this early kind of helps you digest things and have a little more time to contemplate decisions and think about the positives and the negatives.”
Rep. Robert Dickey, who serves on the House Appropriations Committee, said he was surprised to hear about the governor’s August order for departments to slash budgets, but that legislators and the governor’s office should continue to work to find a common ground.
“It’s not unusual to amend a budget and make changes,” Dickey said. “It certainly happened 10 years ago when we had the Great Recession. Some of that is why I think Governor Kemp is trying to get ahead of the curve if revenue falls so we would have a plan with were to go and where our priorities are.”
Challenges lie ahead
Where department heads will find places to cut in a government still lean from the recession era largely remains a mystery, although reductions to staffing and services in the early 2000s economic downturn could offer a hint of what’s to come.
“The first thing we saw during the recession was that state agencies stopped hiring, restricted travel, stopped purchasing new equipment and many started furloughing their employees,” said Danny Kanso, a policy analyst for the Georgia Budget Policy Institute who recently worked for former Lt. Gov. Casey Cagle. “When they say they’re not going to hire, that may not sound like a big deal. But as the state is growing and its demand for more programs are growing while they are already stretched very thin, that is very significant.”
Some of the state’s departments governed by boards released budget plans at recent meetings.
A partial hiring freeze is one way the Department of Human Services is proposing to trim a combined $46 million budget from its amended 2020 and full-year 2021 budgets. That comes at a cost of leaving 200 positions vacant, reducing travel costs, and spending less on contracts for meals for the elderly, according to budget documents.
In some cases, however, details about those spending plans were still up in the air Thursday, a day before they were to be filed.
The Department of Community Health is submitting $10.4 million in cuts to the administration, but specifics were not public by Thursday afternoon, a spokeswoman said.
Meanwhile, the Georgia Department of Education was still looking for fat in its budget Thursday. State school leaders look to trim travel and conference costs to save money.
The education department, which accounts for more than one-third of state’s $27.5 billion budget, is a prime example of how much of the overall state budget is exempted from cuts.
Formula-driven expenses for k-12 and higher education are not part of the mandated reductions. Other programs like Medicaid and adoption services provided through the state Department of Human Services are also exempt.
“I think each and every department is going to have to do something different one way or the other,” England said. “We’ve kept a pretty tight rein and kept everything pretty lean since the recovery began. So it’s kind of looking at it and saying these are either front-line troops on the ground or really the only other option is a reduction in services offered by an agency.”
The cuts coincide with a proposed state income tax rate cut Georgia’s lawmakers are considering for next year that would drop the top rate from 5.75% to 5.5%.
When the state’s Office of Planning and Budget issued spending cut instructions to department heads in early August, the memo also noted the state enjoyed solid revenues in the past year and Georgia’s economy is strong. But the governor also warned in recent public appearances the economy might be headed for a rough patch.
If that’s the case, pushing through an income tax rate cut might be an unusually risky proposition.
“We’ve never cut our largest source of revenue while potentially going into a downturn,” Kanso said.