(The Center Square) – The Georgia General Assembly ended its legislative session Friday with the House approving a budget for the new fiscal year that includes $2.2 billion in cuts.
The House voted Friday in favor of the $26 billion spending proposal, 104-62. It reflects a 10 percent reduction in spending, but that is less than what budget writers expected they would have to cut after the economic fallout from the response to COVID-19.
The Senate approved the amended budget, 40-13, on Thursday. Georgia's new fiscal year starts Wednesday.
The proposal now heads to Gov. Brian Kemp for the final sign-off. It reflects the most significant cuts since the worst year of the Great Recession, the Georgia Budget & Policy Institute said.
"We lived through the Great Recession. We saw what it did to our state's economy, to our nation's economy, to the world's economy," House Appropriations Committee Chairman Terry England, R-Auburn, said. "But it was spread over a period of three, or four, or five years. What we've seen happen to us now happened in one quarter."
After the vote, the House Democratic Caucus accused Republicans of not listening to Democrats' suggestions for generating additional revenue, including increasing the tobacco tax and decreasing corporate tax breaks.
"For the past decade, Republicans have introduced fiscal policies that have only exacerbated our state's economical woes," the House Democratic Caucus said in a statement. "A decade later we are faced with the consequences of shortsighted policies, such as providing tax cuts for the wealthiest, providing tax credits to corporations and more."
During negotiations Thursday, House and Senate budget writers were able to restore $400 million in cuts from the previous budget proposal.
Kemp allowed the appropriations committees to use up to $250 million out of the state's rainy day fund to maintain funding that supports state services, programs and agencies.
"Why not more you may ask, well, statute requires that 4 percent or higher of your revenues remain in the rainy day fund, in the [Revenue Shortfall Reserve]," England said. "It also requires that 1 percent be set aside as well."
There was $2.4 billion in the state's reserve fund, according to the latest report March 31.
Budget leadership told the state May 1 to prepare for 14 percent cuts because of the pandemic. Later revenue reports showed that losses were closer to 10 percent.
Still, before the coronavirus outbreak hit the state, Kemp directed state agencies to reduce spending by 6 percent, which he said was to streamline funding for teacher raises and small businesses, among other things.
Economists then projected a $500 million revenue shortfall, a result of a slash to the top income tax rate from 6 percent to 5.75 percent for the fiscal year.
Lawmakers considered revising the tax break and increasing the tobacco sales tax during the now-finished, 11-day session. Legislation aimed at raising the tobacco tax did not make it to a floor vote by Friday. However, the Legislature did approve a 7 percent vaping tax and licensing fee, which could increase revenue between $9.6 million to $14.5 million.
The final spending plan restores grants for county health departments, funds for child welfare services and eliminates furloughs for state employees.
Although lawmakers were able to secure teacher raises and student transportation, they still cut $900 million from the budget for K-12 education but added $150.8 million for training, enrollment growth and student achievement.
If the budget bill becomes law, the university system would see $242 million in cuts, and students would have fewer options in the dual enrollment program, with an $11 million slash in funding.
The Department of Community Health would receive an additional $178 million in the Legislature's proposal to support enrollment in the Medicaid program and to extend maternal services for pregnant women.
Lawmakers eliminated cuts to medical school grants that are used to attract health professionals to rural and underserved areas and added $12 million in aid for rural hospitals.
However, spending on services for adults with developmental disabilities were reduced by $29 million. The Legislature also cut their salaries by 10 percent, and Lt. Geoff Duncan took a 14 percent cut to his paycheck.
The proposal also calls for spending 4 percent less on human services and 7 percent less on jails and prisons.