ATLANTA – The economic impacts of coronavirus could put the state government $3 billion to $4 billion in the hole during the next fiscal year, an Atlanta-based public policy think tank warned Monday.
Closing such a huge budget shortfall without massive cuts to state agencies and vital services is going to require massive federal assistance, more aggressive than the economic stimulus package Congress passed late last month, said Danny Kanso, a policy analyst for the Georgia Budget and Policy Institute (GBPI).
“If the federal government does not come up with a serious response … it could really have very dangerous effects for the economy and the government of our state,” he said.
In an eight-page analysis released Monday, the GBPI predicted that a sustained unemployment rate of 10% to 20% in Georgia – a good possibility considering that 18% of the state’s workforce has filed unemployment claims in recent weeks – would send state income tax revenues for fiscal 2021, plummeting more than $3 billion below expectations. The new fiscal year starts July 1.
The report projects state sales tax collections to fall $300 million to $670 million, depending on how long businesses are closed to maintain social distancing.
Georgia is to receive about $3.5 billion of the $150 billion Congress earmarked for state and local governments from last month’s stimulus package.
But Kanso noted that money is going primarily to help offset the costs of the state’s response to COVID-19, not to address the looming budget shortfall.
Making up the shortfall by furloughing state workers and making deep cuts to critical state services including education, health care and public safety would only prolong and intensify the economic downturn, he said.
“We can’t cut our way out of this crisis or borrow our way out of this crisis,” Kanso said.
Instead, the GBPI report recommends addressing the shortfall by increasing revenues. A way to do that would be by increasing Georgia’s tobacco tax, currently one of the lowest in the country.
Kanso said raising the tax from 37 cents per pack of cigarettes to the national average of $1.81 would generate $575 million a year.
The report also suggests a deep dive into the generous tax incentives the state doles out every year to generate new jobs and keep businesses already in Georgia from leaving.
Even the state’s most popular – and costly – tax incentive, the film industry tax credit, could be reduced by raiding $2 billion in unused credits an audit turned up in March of last year.
The General Assembly already has passed and Gov. Brian Kemp has signed the fiscal 2020 mid-year budget, which covers state spending through June 30. The GBPI report projects the state will end the current fiscal year with a $1 billion shortfall.
Lawmakers will have to deal with the lion’s share of the projected shortfall when they reconvene the 2020 legislative session to take up the fiscal 2021 budget. The session was suspended indefinitely March 13 as the coronavirus outbreak took hold in Georgia.
Sen. Blake Tillery (R-Vidalia) will chair the Senate Appropriations Committee. (Official Georgia Senate photo)
State Sen. Blake Tillery has been tapped for a powerful position overseeing budget negotiations in the Georgia Senate, replacing the late Sen. Jack Hill as chairman of the Senate Appropriations Committee.
Now in his second term, Tillery, R-Vidalia, will head up one of the General Assembly’s most influential committees that is tasked with crafting a state budget each year before sending it to Gov. Brian Kemp.
Hill, R-Reidsville, was one of the legislature’s longest-serving members before his death earlier this month at age 75. He had chaired the budget-wrangling committee since 2003.
Tillery’s district shares a border with Hill’s in Southeast Georgia. In a statement Monday, Tillery highlighted how the coveted appropriations chairmanship will stay in Hill’s region. He also praised Hill as “a mentor, teacher and friend.”
“No one can fill the shoes he leaves behind,” Tillery said. “I’m humbled and proud his position as chairman will remain in our region.”
Tillery steps into the role at a time when coronavirus is causing economic havoc in Georgia and across the country, driving unemployment numbers sky-high and hammering state revenues.
Then on Monday, an analysis from the Georgia Budget and Policy Institute warned the state budget for this fiscal year and next could be in the hole between $3 and $4 billion.
Tillery is poised to play a major role in the coming weeks once the General Assembly reconvenes to pass a coronavirus-impacted budget for the 2021 fiscal year. State lawmakers have not met since mid-March after suspending the 2020 legislative session as concerns mounted over the virus.
Lt. Gov. Geoff Duncan, who presides over the Senate and picked Tillery for the post, said Tillery is well-equipped to help lead budget talks as the appropriations committee’s former vice chairman.
“Coupled with his thoughtful wisdom, he is perfectly poised to lead the Senate Appropriations Committee – especially as we prepare to tackle serious budgetary issues,” Duncan said in a statement. “I am confident that he will succeed in this new role, because of his dedication to thoroughly understanding fiscal issues and his unbridled care for the people of this state.”
The Capitol building in Atlanta looms on “crossover” eve on March 12, 2020. (Photo by Beau Evans)
Georgia House Speaker David Ralston has created a committee to look at how to close out the remainder of the 2020 legislative session, which was put on hold last month as concerns over coronavirus ramped up.
The General Assembly session has been suspended since March 13, leaving hundreds of bills and critical budget negotiations in limbo. Georgia is also under a statewide shelter-in-place order issued by Gov. Brian Kemp through the end of April.
Ralston, R-Blue Ridge, and Lt. Gov. Geoff Duncan, the state Senate’s presiding officer, have not indicated when they may reconvene the 2020 session, which they are empowered to do.
The General Assembly’s only legal responsibility is to pass a state budget for the upcoming fiscal year before July 1. Top lawmakers like Ralston have signaled the budget could see a dramatic overhaul prompted by the deep economic impacts from coronavirus.
In a letter sent Thursday, Ralston tapped five state lawmakers and several key Capitol staffers to serve on the committee. The committee aims to review protocols and recommend how to move forward with the session, Ralston said.
“None of us can know what the remainder of the session will look like,” he wrote. “All we can know is that how we conduct our business will be significantly different than when we suspended the session on March 13.”
The committee members include House Majority Leader Jon Burns, R-Newington, and House Minority Leader Bob Trammell, D-Luthersville.
Also included are Rep. Matt Hatchett, R-Dublin, who chairs the House majority caucus; Rep. William Boddie, D-East Point, the minority whip; and Rep. Mark Newton, R-Augusta, who chairs the House Special Committee on Access to Quality Health Care.
Among staff, the committee includes Bill Reilly, the House clerk; Ralston’s chief of staff, Spiro Amburn; Ralston’s constituent-services director, Holli Pitcock; and the House communications chief, Betsy Theroux.
U.S. Rep. Tom Graves’ decision not to seek re-election has touched off a crowded scramble for the seat.
ATLANTA – A primarily self-funded candidate leads a crowded Republican field in the battle for campaign bucks in Northwest Georgia’s 14th Congressional District.
Nine GOP hopefuls are vying to succeed U.S. Rep. Tom Graves, R-Ranger, who is not running for re-election.
Businesswoman Marjorie Taylor Greene, who had been running for the 6th Congressional District seat north of Atlanta until December, raised nearly $1.1 million through the first quarter of this year, most coming from a $700,000 loan she floated to her campaign.
Greene’s total far surpasses the $521,581 brought in by another political newcomer, physician John Cowan of Rome, the second-highest fundraiser in the race, according to a report filed this week with the Federal Election Commission. The vast majority of Cowan’s money has come from individual contributors.
Air Force veteran and small business owner Ben Bullock raised $345,230 through the first quarter, also mostly in donations from individual contributors.
Business owner Matt Laughridge of Douglasville is next in the sweepstakes, having brought in $319,124 in January, February and March. Most of his funds came through a $250,000 personal loan.
Former state Rep. Bill Hembree of Dallas took in $253,425 during the first quarter, also getting the vast majority of his campaign war chest – $240,000 – through a loan he made to his treasury.
Clayton Fuller, a lawyer from Dalton, raised $218,378 during the first quarter, including a personal loan of $106,500.
Former State School Superintendent John Barge of Rome brought in $174,651 during January, February and March, most of which came through a personal loan of $150,000. Barge served one term as school superintendent from 2011 until the beginning of 2015 and unsuccessfully challenged then-Gov. Nathan Deal’s reelection bid in 2014.
Kevin Cooke of Bremen, an associate athletic director, raised $98,604 during the first quarter. Business owner Andy Gunther, also from Bremen, had brought in just $10,296 through the end of March, most from a personal loan.
Only one Democrat is running for the seat Graves is vacating is the heavily Republican 14th District. Kevin Van Ausdal of Rossville has struggled to raise money, bringing in only $7,401 by the end of March, including a $3,000 personal loan.
Georgia’s 14th Congressional District stretches from Paulding and Haralson counties north through Rome, Calhoun and Dalton to the Tennessee line.
U.S. Rep. Doug Collins’ decision to run for the U.S. Senate has prompted nine Republicans to seek his U.S. House seat. (Photo by Beau Evans)
ATLANTA – The top fundraiser in a crowded Republican field looking to succeed U.S. Rep. Doug Collins in Georgia’s 9th Congressional District has never held elective office even though three state lawmakers are also in the race.
Ethan Underwood, an attorney and GOP activist, raised $231,800 during the first quarter of this year, most in the form of a $160,000 loan he made to his campaign, according to a report filed this week with the Federal Election Commission (FEC). That’s tops in the 9th District, a relatively low-cost place to run for Congress because it’s primarily outside of the Atlanta advertising market.
Also, candidates in the 9th District haven’t had as long to raise campaign contributions as those in other parts of the state. Collins, R-Gainesville, didn’t announce he was leaving the House to run for the U.S. Senate until late January.
Another factor dampening donations is the distraction to normal politicking wrought by the coronavirus pandemic.
Collins’ impending departure convinced a large field of Republicans to jump into the contest for his seat in the heavily Republican district.
State Rep. Kevin Tanner of Dawsonville raised $222,710 during the first quarter. He wasn’t as reliant on his own pockets as Underwood, floating himself a smaller $50,000 loan.
State Rep. Matt Gurtler of Tiger was third in fundraising, bringing in $177,599 as of March 31, with only a $7,000 personal loan supplementing his campaign donations.
Andrew Clyde, a Navy veteran and firearms distributor, raised $120,235 during the first quarter, mainly through a $100,000 personal loan.
State Sen. John Wilkinson of Toccoa, the third Georgia legislator on the June 9 Republican primary ballot, raised $114,273 through March 31, mostly from individual contributors.
Two other Republican hopefuls have struggled to raise donations. Retiree Maria Strickland brought in just $32,758 during the first quarter, all from a personal loan, while gun store owner Kellie Weeks received just $5,525 in contributions.
The candidate with arguably the most name recognition in the contest, former U.S. Rep. Paul Broun, had not filed a report with the FEC as of Friday. Broun, a physician, represented Georgia’s 10th Congressional District from 2007 to 2015.
Michael Boggus, a crane operator, also had not filed a report to the FEC as of Friday.
Democrat Dan Wilson, a retire, had raised $20,127 through March 31. Another Democratic retiree, Devin Pandy, had not filed a report as of Friday.
The 9th Congressional District covers northeastern Georgia stretching from south of Gainesville and the northern end of Athens to the state borders with South Carolina and North Carolina.
