Members of the Georgia House and Senate Appropriations Committees expressed concerns about the effects of proposed state budget cuts on employees and services.
Kelly Farr, director of Gov. Brian Kemp’s Office of Management, told the committees Friday that he really didn’t know where the cuts would be. He does expect that agencies will do a “thorough dive into what they are not able to do before they have to do something that impacts people and services.”
Georgia’s state agencies are being asked find 4 percent cuts for this fiscal year and another 6 percent by 2021. The request from Kemp came before a recent decrease in revenues that has left the state’s budget $90 million in the hole in just the first two months of the fiscal year.
“The governor did not have any premonition that the revenues were going to behave the way they have since July,” Farr said.
Rep. Al Williams, D-Midway, said “there’s a lot of panic among rank and file workers” over possible job cuts.
Staffing cuts are certainly possible but the intention is for the agencies to look at unfilled positions, travel expenses or recurring operation costs before considering layoffs, according to Farr.
“Before you start making decisions about you need to fire people, we need to have a conversation about why,” Farr said.
Several economists offered their take on the state’s economy and the possibility of a recession.
State economist Jeffrey Dorfman said Thursday the chance of a recession was about 50/50. On Friday, Kennesaw State University’s Dr. Roger C. Tutterow put the chance at about one in three.
The challenges are a tight labor market and the possible effects of ongoing trade disputes, the economists testified.
Tutterow said he isn’t concerned about the tight labor market causing inflation but he is concerned that companies can’t expand products or enter new markets if companies can’t hire the workers, calling the labor market an “albatross.”
The metro Atlanta area has grown, but for the growth to continue more people need to migrate into metro Atlanta from other areas, said Dr. Tom Cunningham, chief economist for the Atlanta Chamber of Commerce.
Trade issues could have an impact but by how much is not known. In the meantime, state officials will plan for a possible downturn, Farr said.
“I think we are asking them [state agencies] to plan for what we think the reality may be but we hope that when everybody comes back in January, somehow revenues have just started to flourish and its because of something we didn’t expect or understand,” Farr said.
The two days of testimony gave lawmakers greater insight and more work will need to be done over the fall, House Appropriations Committee Chairman Terry England, R-Auburn, said.
His Senate counterpart, Jack Hill, R-Reidsville, agreed.
“We have ahead of us maybe some hard decisions, maybe things do get better but by facing them now I think we are ahead of the game,” Hill said.