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Perdue outlines proposed budget cuts during State of State address
State of the State Heal
Georgia Gov. Sonny Perdue, center, delivers the State of the State address in the House chamber Wednesday. During the speech, Perdue proposed a slimmed-down budget Wednesday that slashes spending to close a $2.2 billion budget hole. - photo by Associated Press
    ATLANTA — Gov. Sonny Perdue proposed a slimmed-down budget Wednesday that slashes spending to close a $2.2 billion budget hole. But he also wants to boost borrowing to stimulate the state’s economy by creating 20,000 jobs building schools and libraries.
    Teachers and other state employees will not get a pay raise under the plan.
    In his annual State of the State address, Perdue called for legislators to remain optimistic ‘‘even in the face of difficult economic cycles.’’
    Perdue is proposing a $19.2 billion amended budget for the current fiscal year, down from $21.2 billion, and a $20.2 billion spending plan for the fiscal year that starts July 1. Lawmakers returned to the Capitol on Monday and are constitutionally required to approve the budget before their 40-day session ends.
    Perdue acknowledged the ‘‘job of budget cutting is hard right now.’’ He is proposing pulling more than $600 million from the state’s rainy day reserve fund, which now stands at $1.2 billion.
    ‘‘Political mantras aside, cutting more than 10 percent from a budget cannot be achieved by simply cutting waste,’’ the Republican governor said. ‘‘While we have worked for six years to do more with less, at some point, in business or government, it becomes less with less.’’
    To avoid deep cuts to the Medicaid program for the state’s poorest residents, Perdue said he wants hospitals and health insurance plans to pay a 1.6 percent fee on their total revenues.
    The proposal faces stiff opposition from the health care industry, a powerful lobbying force at the state Capitol, as well as some conservative Republicans, who’ve pledged not to raise taxes or fees to plug the budget hole. Health officials argue it could boost the cost of insurance and discourage the sick from seeking treatment if the costs are passed along.
    But Perdue defended the proposal.
    ‘‘Please do not rush into a shortsighted cuts that would have long-term consequences for Georgia’s most needy,’’ Perdue told lawmakers.
    Perdue promised to again push for ‘‘super speeder’’ legislation to funnel $60 million to the state’s struggling trauma care network. He first began pushing in 2007 to increase fines for people caught driving over 85 mph on any Georgia highways, a plan that has failed to win legislative approval. Perdue has argued that reckless drivers are causing accidents that are clogging the state’s emergency rooms.
    Perdue would close the budget gap, in part, by eliminating Homeowner Tax Relief Grants the state pays to local governments, which are then passed along to homeowners as tax credits. They average about $200 to $300 per household. Their loss could mean homeowners could see their property taxes rise. Lt. Gov. Casey Cagle has pledged to restore the funding.
    Perdue promoted some education initiatives that would boost pay for the state’s best teachers and principals. But the proposals won’t take effect until 2010 and education officials expressed dismay that Perdue made scant mention of school funding this year.
    ‘‘Basically the governor said a whole lot of nothing,’’ Jeff Hubbard, president of the Georgia Association of Educators said. ‘‘We’re pretty much expecting massive, massive cuts.’’
    Perdue had promised a state stimulus package of bond money to fund the construction of schools, libraries and the deepening of the port in Savannah road. He said Wednesday that his budget blueprint will include $1.2 billion in bond money, a 20 percent increase from the roughly $1 billion in borrowing he has traditionally proposed. He estimated it would create an 20,000 new jobs.
    The incoming administration of Democratic President-elect Barack Obama has also talked of providing infrastructure money to states to kick start the economy. There has also been talk of an infusion of federal cash for Medicaid. Perdue, a Republican, said Wednesday he’s not counting on that money anytime soon.
    ‘‘We cannot plan by relying on the unknown, and the budgets I present to you today are balanced and do not assume money from Washington,’’ Perdue said.
    Associated Press Writer Greg Bluestein contributed to this report
    Governor’s Office of Planning and Budget:

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