On May 28, Gov. Sonny Perdue again reduced the revenue estimate for fiscal year 2009.  HB118 as passed, was based on a state funds budget of $18,903,699,531. The governor reduced his revenue estimate by $274,342,946 to $18,629,356,585. This marks the fourth time the governor has formally reduced the revenue estimate for the FY09 budget and roughly the seventh time that state budget planners have had to revisit the FY09 budget.

Over the past five months, on average, the monthly revenues have been 20 percent less per month than FY08 returns. Budgeters are now expecting that May and June may follow a similar pattern leaving revenues $800 to $900 million short — even despite $1.6 billion in cuts and $1 billion in reserves and stimulus funds. The previous shortfall was estimated at 13.3 percent, but now is looking like it will come in closer to a 17.3 percent shortfall over the original FY09 budget. Of course, the original FY09 budget assumed some modest growth over FY08. The actual reduction in revenues from FY08 will be closer to 12-13 percent, if the state continues at 20 percent below prior year months.

The state currently has $565.9 million remaining in the revenue shortfall reserve, but even this will not be sufficient to make up the shortfall. The governor is therefore proposing to cut the final June payments to agencies by 25 percent. This cut will be the equivalent of a 1-2 percent cut to an agency’s total budget; however, because it will be taken in the final month, this cut may pose a particular hardship for some agencies that have already contracted out or obligated many of these funds.   

The state will also make use of $35 million in debt service savings due to receiving a very low interest rate for the state’s AAA rated debt. Also, because the state has been prudent in the appropriation of the federal stimulus funds, there is $734 million in budget stabilization funds still available for appropriation. These funds were originally reserved for FY11. The governor will likely use this to help mitigate the impact of the final reductions on state agencies.

Another consideration related to this dramatic decline in revenues is the impact on the FY10 budget. The FY10 budget was originally based on a 2 percent decrease in revenues from FY09.  However, if FY09 is 13 percent below FY08, the state will start FY10 with revenues already 4 percent below the original projected amount. So going into FY10, the state will immediately be facing around a $462.7 million shortfall, and this assumes that revenues do not continue to decline.   

There will be very hard decisions to be made early in the FY10 budget year in July or before.

More legislation signed
by the governor
Judiciary

SB 13 — Clears the way for juries to utilize a sentence of life without parole in cases where prosecutors choose not to seek the death penalty. Simplifies what was a cumbersome process.

SB 79 — Brings Georgia law into line with federal law by allowing for greater public disclosure from DHR when a child dies or almost dies due to child abuse or neglect in state custody.

SB 172 — Allows psychiatric counseling and treatment to be included in victim’s compensation.

SB 246 — Allows victims to be notified when violent juvenile delinquents are to be released from detention.

HB 147 — Requires professional bondsmen to provide clerks of court with business name and complete address information including phone number and email address for receiving notices.

HB 195 — Clarifies that members of electric membership corporations cannot be excluded from serving as a juror on a case where EMC is involved solely on the membership basis.  Judge has final say in determining bias.

HB 254 — Requires DHR to attempt to locate adult relatives of a child removed from custody of parents. Requires notice of child placement procedures and provides for conditions that must be met prior to a child placement

HB 315 — Requires all fees be disclosed by real estate brokers and salespersons for all real estate transactions. Failure to do so constitutes an unfair trade practice.

HB 388 — Changes the definition of “child” to include human embryos and provides for embryo adoption.

I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811