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Published Saturday, November 21, 2009 in Local

Senator shares bad budget news with teachers

By Sarah Fay Campbell

The Times-Herald

State Senator Mitch Seabaugh, R-Sharspburg, didn't have much good news to share at a meeting held with local educators Thursday night.

The state's budget crisis is bad. And it looks to be getting worse.

"We are in unprecedented times," facing unprecedented challenges, Seabaugh told a group of teachers and Coweta School System personnel at the meeting at the system's Werz building.

Seabaugh, a former accountant who serves on the Senate Appropriations Committee and as majority whip, said he had recently met with some local business leaders about the state's financial woes.

"I told them there are some things we need to do and I need your input about what makes sense," Seabaugh said. He feels that "across the board cuts" are never the way to go. Instead, he wants to find strategic budget cuts.

And that's why he wanted to talk to local educators.

"The important thing to remember is no decisions have been made," Seabaugh said. "So if you're hearing rumors: they're going to do this or do that -- someone might be looking at that, but the decision has not been made."

When the Georgia General Assembly drew up the budget for Fiscal Year 2010, which began July 1, everybody knew the economy was bad and that tax revenues would be down.

But the estimates were way, way off. Gov. Sonny Perdue is responsible the "revenue estimate," which is what the legislators use to create a budget each year.

Perdue's estimate that revenues be up 1.95 percent over last year was much too optimistic.

That became obvious during the summer, and Perdue reduced the revenue estimate by $900 million. The withholding of those funds brought on rounds of furloughs for state employees, including teachers.

When Perdue made that reduction, state revenues were down 3.54 percent.

"Today I got an update, and now it is down 7.2 percent from last year," Seabaugh said.

So when the legislature convenes in January, they will have to find an additional $348 million in cuts -- just for the period between January and July.

In the spring of 2008, as the economy slowed, the legislature made cuts of $1.3 billion. There were also "one time funds" of $623 million. The budget, for 2009, got $672 million in federal stimulus money, and the state pulled $776 million out of its reserve funds.

"We spent more than what we brought in, in actual revenue, in fiscal year 2009," Seabaugh said.

Last spring, legislators had to fill an even bigger budget shortfall -- $4.39 billion. The cuts from 2008 were carried through, and there were $967 million of additional cuts. The state was able to use $238 million in "one time funds," and $1.4 billion in stimulus money. The rest of the budget was made up with the remaining $476 million in the "revenue shortfall reserve."

When the legislature begins building the budget for Fiscal Year 2011, there will be no more one-time funds. And the state has no more money in reserves. Georgia is expected to get just over $1 billion in federal stimulus. There will have to be an additional $1.02 billion in agency reductions.

If things haven't picked up by 2012, there will be even more cuts, because the federal stimulus money won't be available.

Current estimates expect the state will have to cut yet another billion from agency budgets.

That doesn't even take into account "natural growth areas," such as education and health care.

"We have an enormous challenge ahead of us," Seabaugh said.

"I felt like y'all needed the opportunity to see that, and to understand what it is we're trying to do."

He hopes that the teachers, and other Georgians "would be willing to engage and get some ideas about what we could do to meet those challenges."

"Those that work on the front lines every day know it better than anybody," Seabaugh said.

Education is the state's biggest expense. K-12 education is 41.8 percent of the 2010 budget. Higher education takes an additional 16.4 percent.

Despite the high cost, education has fared quite well in the past few rounds of budget cuts. The Department of Community Affairs sustained a 73 percent cut. The Georgia Department of Natural Resources got a 21.43 percent cut, and the Department of Public Safety received a 14.95 percent cuts. Most state agencies were similarly cut.

Education only got a 3 percent budget cut.

Furlough days, though not popular, are very effective.

Each day that state employees are furloughed saves the state $45 million. Teachers and other employees in K-12 education make up $33 million of that.

One teacher at the event said that her husband works for the GBI so "my family is getting double furloughs."

She wanted to know "when will the governor consider raising taxes?"

"I know it is not popular," the woman said, but "we feel like it is not the state employees' jobs to continue carrying the burden of the entire state."

"What are you going to tax?" Seabaugh asked. "Everybody in this room knows people that don't have a job." He said he has done accounting work for clients "that paid six figures in taxes, who now have a net operating loss because the economy basically ran them out of business."

Those companies probably won't show a profit, and therefore can't be taxed on their profit, for three or four years.

"Who are you going to tax?" Seabaugh asked again. "Of the people I know, 19 out of 20 are making substantially less money now than they did a year ago. Probably that number is more like 49 out of 50," he said.

It is probably something the governor is considering, he said.

One woman said she'd like to see the government cut some frills.

Another said she'd like to see the state do away with the sales tax holidays for school supplies. "I know that is chump change... but it all adds up, and it's not that much savings for families," she said.

This year's tax holiday was expected to reduce state revenues by about $13 million.

There have been some discussions over the past few years "whether or not those things really provide the benefit that we believe they do," Seabaugh said. The tax holiday does give parents, and teachers, "a little bit of a break."

Education budgets are getting cut "yet the Department of Education keeps sending out initiatives that are putting out an additional amount of work on the shoulders of teachers," said one educator.

One teacher mentioned the possibility of a "bullying bill" becoming law. "What I've thought of is how much extra work that might entail and how much more stuff that could put on us with less resources... I think this would be a bad time to put more things on teachers."

"That is what we need to hear," Seabaugh said. "It helps us to have the practical application so that we can be able to make a good decision on it."

One way the state could cut costs is by not having so many duplicate tests, said one educator.

The end of course tests, and the graduation tests, "really are duplicates of each other," she said. "We have been told that, eventually, the high school graduation test would go away. I would love to know how many millions are being spent," she said. "One set of tests is adequate."

Eighth graders take three tests during the year "and we don't even use one of them," one teacher said.

Seabaugh was asked if anyone is considering changing the Special Purpose Local Option Sales Tax laws to allow SPLOST funds to be used for operations, instead of only capital projects.

"That is a thought that someone has out there to do that," Seabaugh said.

Seabaugh was also asked about the possibility of using more technology to reduce paperwork and make it easier to store student records, such as a birth certificate.

There are many ways in which the state could save money with better technology, Seabaugh said.

But systems to eliminate that require big investments in hardware and software. There's not a quick enough return to do such things right now, he said.

It is, however, "the time to question everything that we do."

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11/25/2009