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Rainy day fund to balance budget
Perdue vows to lower deficit without federal aid

ATLANTA - Gov. Sonny Perdue proposed withdrawing more than $600 million from the state's rainy day fund to help bridge a more than $2 billion funding gap.

With lawmakers also retooling the current fiscal year's budget, Perdue released a proposed $20.2 billion budget for the upcoming fiscal year during his annual State of the State address Wednesday.

Perdue vowed to balance the state's budget without relying on Washington, where federal aid to states is proposed but hasn't been approved.

Instead, he called on legislators to approve spending cuts, a reorganization of the state's health and human services bureaucracy and a new fee for hospitals and health insurance providers.

"Political mantras aside, cutting more than 10 percent from a budget cannot be achieved by simply cutting waste," Perdue said. "While we have worked for six years to do more with less, at some point, in business or in government, it becomes less with less."

After years of working to bolster the rainy day fund, Perdue on Wednesday proposed taking $50 million out of the fund for the fiscal year 2009 plan and $408 million for fiscal year 2010, as well as using $187 million set aside for a midyear education adjustment.

"We have not begun to scrape the gold off the dome, but we're getting close," Rep. Melvin Everson, R-Snellville, said.

Rep. Bobby Reese, R-Sugar Hill, said he doesn't like the idea of using the reserve cash.

"I'm real conservative. I say, let's hold onto as much as we can, but that's his decision," Reese said.

Reese said he was also wary of the Department of Human Resources restructuring, which would create three departments, focusing on health, behavioral health and human services.

While the proposed budget does not include a pay raise for teachers, Perdue did propose an incentive pay program for principals and teachers to make salaries merit-based.

The governor announced a 20 percent increase to the bond program to fund state building projects, formulating a $1.2 billion package that would create 20,000 construction jobs. Included in the package is $2 million for infrastructure upgrades at Georgia Gwinnett College.

"We're going to maintain a long-term perspective. We are not going to panic and make knee-jerk decisions that will have negative long-term consequences," Perdue said.

While he did not offer a solution to the transportation funding issues, where legislators are expected to debate a 1-cent sales tax, Perdue reissued a call to impose fines on excessive speeders, which could provide $60 million to the state's trauma care network. He also suggested a 1.6 percent fee on hospitals and health insurance providers to close a Medicaid funding gap.

"Don't hear me dismissing the scope or severity of this downturn, but more importantly don't leave failing to hear the message that we need to look beyond this downturn," the governor said.