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Down economy prompts Perdue to slash budget requests

ATLANTA - Citing the sluggish state and national economies, Gov. Sonny Perdue on Monday recommended more than $300 million in spending cuts to adjust for less-than-expected revenue growth.

The Republican governor laid some of his own proposals on the chopping block, including more than one-third of the funding for a new initiative aimed at reducing truancy, and curbed pay raises for teachers and state employees from 2.5 percent to 2 percent.

"We see the economic clouds gathering across the nation," Perdue said during a news conference at his Capitol office. "We can't expect to see these miss our state."

The governor acted as the state Department of Revenue announced net tax collections for February of $965.4 million, only 0.5 percent higher than the $961.2 million brought in during the same month last year.

During the first eight months of this fiscal year, state revenues were running just 1.9 percent ahead of fiscal 2007.

Perdue said such slow growth would make it impossible for the state to meet revenue projections either for fiscal 2008 or the coming fiscal year.

As a result, he said he is lowering the revenue estimate for this year by $65 million and for 2009 by $245 million.

To meet those reduced estimates, Perdue is recommending $310 million in spending cuts to his mid-year and fiscal 2009 budgets.

Under the governor's proposal, the entire reduction in the mid-year budget would come by forgoing $40 million he requested for technology improvements in Georgia schools and $25 million he sought to buy 557 new school buses.

Those two items already have been major sticking points keeping the House and Senate from reaching agreement on the mid-year budget.

Senators yanked the $65 million out of the mid-year spending plan, arguing that both projects should be considered as part of the 2009 budget.

Perdue recommended a long list of cuts for next year to get to $245 million.

The largest reduction, $47.2 million, would be achieved by funding a list of repairs and renovations on the campuses of state colleges, universities and technical colleges through bonds instead of cash.

Lowering pay raises for teachers and state workers would save another $46.1 million.

Perdue also recommended eliminating $16.9 million earmarked for a health insurance partnership he announced last year. The money was to be used as incentives for small businesses to extend health coverage to their employees.

The governor's new initiative to hire "parent recruiters" for schools with high absentee rates would be reduced by $5.5 million from his original $14 million proposal.

Along with the cuts, Perdue asked agency heads to avoid unnecessary travel and refrain from filling non-critical jobs.

Perdue said he would rather do without new programs and cut out unnecessary spending than start chipping away at the state's record $1.5 billion in reserves.

"They're there if we need them," he said. "(But) I'd rather manage discretionary spending and non-critical hiring."

Senate Appropriations Committee Chairman Jack Hill said Perdue made the right call in protecting Georgia's "rainy-day" fund.

"People are saying this downturn is going to last a while," said Hill, R-Reidsville. "We want to make sure not to fritter away our reserves too early."

Hill said the governor's willingness to sacrifice some of his own programs will send the right message to convince lawmakers to support his recommendations.