Paul_Yates's Blog

Georgia's budget shortfall has now been pegged at $1.6 billion. Gov. Sonny Perdue talked about the situation in Friday afternoon conference call with legislative leaders. Instructions were sent to state agencies. The state will start withholding 6% of budget allotments.

K-12 education is a key exception to the cutbacks, but education will still take a 2% reduction. The Medicaid program will be given a 5% cutback. The homeowners' tax relief grant program for the state will be held back for now.

The governor told us earlier in the day that teachers' pay raises, scheduled to be implemented in September, will be maintained. Employee pay raises planned for later will likely be deferred, with plans to make state employees "whole" later.

State agencies will be instructed to plan for the possibility of 10% cutbacks. A special legislative session to address the budget appears unlikely at the moment. And, at the moment, there appears to be relative harmony among the governor and legislative leaders on the state's course through this financial storm.