Georgia House OKs midyear budget, reverses some cuts governor pushed

The Georgia House staked out its position on adjustments to this year’s budget Wednesday: They’re willing to adjust to unstable revenues in recent months, but are not willing to make all the cuts recommended by the governor.

By a 126-46 vote, the House approved adjustments to the budget for the year that ends in June. 

The revised spending plan sets aside more money than Gov. Brian Kemp proposed for accountability courts, public defenders, food safety inspectors, county public health departments, services for children in need, training for doctors who agree to work in rural ares and more.

“We will continue to fund priorities that directly respond to our constituents’ needs and demands,” said state House Appropriations Chairman Terry England, explaining his committee’s draft spending plan for the next four months on the House floor.

The proposed $27.4 billion budget total for fiscal year 2020 is the same as in Gov. Brian Kemp’s budget proposal.

But England, an Auburn Republican, said the House was able to spend more because it found more vacant positions to defund and more efficiencies than the governor proposed in January. And the revision proposes to delay buying cars, setting up electronic medical record systems in prisons and implementing new programs.

In August, Kemp ordered most state agencies to propose 4% cuts for the current budget year that just started July 1, 2019. But his order exempted the big, population-driven increases that occur every year in health care and education. So his draft budget is still higher than the one for 2019. But discretionary spending is lower in most state departments.

The $159 million in cuts might not sound like a lot in the context of a $27.4 billion budget. But it is going to squeeze some people, according to England. 

“To suggest that the impact of $159 million reduction in state funds and 1,255 vacant positions being eliminated or held in this budget would not be felt is disingenuous,” England said. 

House Speaker David Ralston, a Blue Ridge Republican, said that the budget aligns with House priorities. 

“I think the budget that left the House today … is a much better budget, in terms of taking care of things that Georgians need, than the budget that was proposed to us,” Ralston said. 

The state Senate is next up with a chance to make its own mark on the 2020 budget in the coming weeks. Any variances from the House version are to be settled in negotiations among the House, Senate and the governor. The House can now begin its work on the 2021 $28.1 billion spending plan that is set to take effect this July 1.

But 46 House lawmakers, mainly Democrats, disagreed with the plan. 

“The $159 million we’re about to cut in this budget aren’t just dollars and cents. They have names and they live in our districts,” said Minority Leader Bob Trammell, a Luthersville Democrat.

“The question is going to be why did we have to cut when times are so good?”

Georgia’s unemployment rate is hitting new lows and the economy is doing well. 

But tax revenues aren’t rising in step. That’s in part because in 2018, state lawmakers cut the top rate of income tax from 6% to 5.75%. England also blamed the lingering economic hangover from Hurricane Michael, the 2018 storm that wiped out crops all over southwest Georgia.

The money the House restored to behavioral health, public health and mental health services provided welcome news to Taifa Butler, president and CEO of the Georgia Budget and Policy Institute, an Atlanta-based think tank. 

She said she’s disappointed the House did not add new money for the state’s Childcare and Parent Services program, which assists low-income families with childcare. A $500,000 increase that was supposed to be in the pipeline this year would have helped perhaps 100 more children.

The money for childcare still might be added as budget negotiations go on.

Budget wrangling will only get tougher in the coming weeks, as the Legislature turns to the spending plan for next year. 

The governor’s proposed $28.1 billion budget for 2021 has many of the cuts embedded that he proposes for this year.

And it includes a big new expense of $350 million for teacher raises.

That leaves little obvious space to squeeze in a cut to the top income tax rate from 5.75% to 5.5%, which would take another $550 million out of the budget. Lowering the income tax rate for 2021 is a top priority of House Speaker David Ralston, who reiterated Wednesday he views it as a promise lawmakers made to the taxpayers of Georgia.

In 2018, the state Legislature scheduled that for discussion this year, when it passed what it saw as the first round of two possible income tax cuts.

But Kemp’s draft budget does not reflect any such income tax cut — as written, it depends on a top income tax rate of 5.75%.