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State government fiscal picture suddenly bleak
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Forsyth County News
Thanks to years of exceptional growth in its economy, Georgia’s state government has been in pretty solid financial shape of late, but ominous dark clouds are roiling over the state’s fiscal picture and there aren’t any rays of sunshine on the immediate horizon.

The signs are everywhere. Gov. Sonny Perdue has asked state agencies to cut their budgets 6 percent, and others suggest the ultimate reduction may have to be higher. Money promised to local governments for property tax relief has been frozen. Members of the state House are being asked to re-evaluate spending approved for certain local projects to see if it can be eliminated. Some state parks may be closed.

Late last week, the city of Cumming found out it won’t be receiving $2 million in state funds to complete its pipeline project because the state has suspended the $40 million water grant program.

In total, state officials are looking to cut some $1.6 billion in spending due to dramatic decreases in revenue, and indications are things may get worse before they get better.

The change in status since the legislature adopted the budget last spring shows how diffucult economic forecasting at the government level can be.

The decision by Perdue to freeze $428 million in tax relief grants served as an abrupt wake-up call for local officials across Georgia, who suddenly found themselves facing the unexpected necessity of generating more local tax dollars to replace those expected to come from the state.

Georgia certainly isn’t alone in navigating tough fiscal waters. More than half the states in the nation are facing the possibility of budget deficits due to the economic downturn.

While the funding formulas and economic factors are complex, the bottom line when it comes to government spending is really pretty simple — when revenues are lost, taxes either have to be increased or services have to be reduced, at both the state and local level.

Across Georgia, governments are looking at ways to reduce spending, but there are certain essential services — public safety, medical care, education — where options for cuts are limited.

At the same time, in bleak economic times increasing taxes means a financial burden that many of the state’s residents simply cannot bear.

Families across Georgia are facing hard economic choices on a daily basis. So, too, are the elected officials charged with stewardship of the public’s money.