Saturday, March 14, 2009

Governor Perdue Signs Amended FY09 Budget

Friday Governor Sonny Perdue signed into law House Bill 118, the state’s Amended Fiscal Year 2009 budget. The amended budget signed by the Governor stands at $18.9 billion.

“This is a budget that focuses on the core services of government,” said Governor Perdue. “We have made effective use of federal stimulus dollars and the state’s rainy day fund, which we worked so hard to build up, to lessen the impact of this economic downturn and plan for next year’s budget. Through sound management by our agency leaders and wise decisions by lawmakers, Georgia will endure a challenging economy and emerge ready to prosper.”

Governor Perdue has taken a number of steps to ensure the FY 2009 budget does not spend more than the state will collect. A year ago, Governor Perdue reduced the revenue estimate for the budget by $245 million to begin preparations for the slowing economy. In August, amid continuing revenue declines, the Governor announced six percent reductions in state agencies except for education and some health care programs.

In February, Governor Perdue again reduced the revenue estimate by another $450 million. A total of $2.6 billion, well over 10 percent of the original $21.1 billion budget, has been cut from the spending plan. Those cuts have been softened by strategic use of the state’s rainy day reserve fund and the recognition of funding from the federal stimulus package.

The budget maintains critical services in public safety, healthcare, and education, and includes the pay raises for teachers that were granted at the beginning of this school year. The budget also maintains Georgia’s strong infrastructure in education, transportation, and economic development and takes advantage of the state’s AAA bond rating to save the state $10.5 million through lower construction costs. The AFY09 budget includes $428 million in Homeowner Tax Relief Grants for this year, as required by House Bill 143, which the Governor signed in February.

Certain language contained in HB 118 was included for informational purposes and thus did not constitute an appropriation. Because the language is not an appropriation, it is non-binding.

Intent Language Considered Non-binding
Section 16, pertaining to the Department of Community Health, page 28, line 834:

The General Assembly seeks to earmark funds for a specific vendor, serving specific geographic locations. Pursuant to Op. Att’y Gen. 73-132 and the general law powers of the department, the department is authorized to utilize appropriate procurement and vendor management procedures to ensure that program services intended by the General Assembly are provided in a fair, equitable, efficient and effective manner. The named contractor in this earmark is not prohibited from participating in the department’s procurement process.

Section 16, pertaining to the Department of Community Health, page 30, Paragraph between line 904 and 905:

The General Assembly seeks to set limits on the employer contribution rate for the teachers’ health benefit plan and the state employees’ health benefit plan for Fiscal Year 2009. This language dictates a matter controlled by general law and is therefore null and void. The Department is authorized to establish employer contribution rates in accordance with the general law powers of the Department.

Signing Statement of Interpretation

Section 22, pertaining to the Department of Education, page 54, line 1644:

The General Assembly included $145,317,456 of federal stimulus funds from the American Recovery and Reinvestment Act of 2009 (“ARRA”) for the Quality Basic Education program in the Department of Education. I am not striking any language in this portion of the budget. While I am confident that the education system will receive more than this amount in federal stimulus funds in the current fiscal year, it is impossible at this point to know the allocation of these funds. Because the General Assembly chose to immediately transmit the budget before the U.S. Department of Education has clarified the application process or issued rules and regulations for the use of the stimulus funds, and because I as Governor must certify that Georgia is using federal funds in compliance with the ARRA, the intent language contained in this line may be subject to changes caused by federal mandates.
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