Spending limit back before lawmakers

ATLANTA - An annual cap on state spending will be back on the General Assembly's agenda this winter, a Senate Republican said Monday.

But members of the Senate Limited Taxation Study Committee still have an important detail to work out: how to determine what the cap should be.

A House study committee met several times last year to consider introducing legislation to limit annual increases in the state budget to the

rate of inflation plus population growth.

But the so-called Taxpayers' Bill of Rights never surfaced during this year's legislative session, partly because voters in Colorado - the state Georgia's proposal was modeled after - approved a referendum in November 2005 to freeze their spending cap for five years to let that state spend more money on education, health care and transportation.

Lobbyists for local governments and school systems complained when the proposal came up last year that putting an artificial cap on spending could cripple the state's ability to deliver vital services.

But Senate Republicans kept it alive by creating a study committee to reconsider it this summer and fall.

On Monday, Sen. Chip Rogers, R-Woodstock, a member of the study committee, said legislation on the issue will be introduced during the upcoming session.

During Monday's final meeting of the panel, Senate Budget Director Kevin Fillion said a cap wouldn't necessarily have a major impact on spending levels.

If the inflation rate used to determine the spending cap were linked to what governments pay for purchases rather than the Consumer Price Index, state budgets would be less likely to run up against the spending cap,

he said.

According to figures Fillion presented to the committee, Georgia would only have hit the cap in four of the past 20 years if the state had a spending limit in place indexed to the costs of government purchases.

Sen. Mitch Seabaugh, R-Sharpsburg, the committee's chairman, said such a cap would be an insurance policy for lawmakers crafting annual budgets.

"What we're talking about doing is a policy to ensure that the good management we've seen in the last few years continues,'' he said.

But Sen. Chip Pearson, R-Dawsonville, said the status quo isn't good enough. He noted that state spending has far outstripped the general rate of inflation during the last two decades.

"We cannot continue to go on at that rate,'' he said.

Pearson warned against adopting a "feel good'' cap that isn't effective at reining in spending.

Fillion offered to do further research and come back with a formula that would base the inflation rate on consumer and private sector spending as well as government purchases.

Seabaugh asked Fillion to wrap up his work in the next couple of weeks, which would give the committee time to issue its recommendations by the end of the month.