Forecasting a major blow to the state’s economy and revenue collections due to the coronavirus pandemic, Georgia lawmakers in charge of the state budget sent a memo on Friday asking agencies to prepare for cuts of 14 percent across the board, totaling nearly $4 billion.
The call for reductions comes as some retail stores and malls in Georgia began to reopen on the first day after Gov. Brian Kemp lifted a statewide stay-at-home order, part of one of the most aggressive pushes of any state in the nation to reopen. Businesses like restaurants, tattoo parlors and movie theaters were already able to allow customers back in with restrictions.
Total confirmed infections in Georgia surpassed 27,490 on Friday, according to the latest data from the state’s Department of Public Health. The state has counted at least 1,166 deaths caused by the virus. The Centers for Disease Control and Prevention said that 14 Georgia meat processing plants had reported virus outbreaks through Monday.
The memo was sent by state House Appropriations Chair Terry England, Senate House Appropriations Chair Blake Tillery and Kelly Farr, director of the Governor’s Office of Planning and Budget. It made clear that no areas would be spared, including funding for education and public health.
“While the Great Recession of 2008 was considered then to be a ‘once in a lifetime’ event, our current situation will certainly overshadow it,” the memo says. “That is why this request is being made to ALL areas of the state budget with no exceptions.”
Kemp earlier this year had set a $28 billion revenue estimate for fiscal year 2021, which begins July 1. But that was before the coronavirus pandemic shuttered business across the country and left more than a million Georgians out of work. And a good part of the $2.8 billion in reserves that the state started the year with may be needed to plug holes in the current year’s budget.
The Georgia Budget and Policy Institute last month suggested state revenues could drop by $3 billion or more next year. It’s unclear whether the state will get federal aid to make up part of the gap.
Many of Georgia’s 180 K-12 public school systems have already signed contracts with teachers for next year, although Angela Palm, a lobbyist for the Georgia School Boards Association, said many contracts contain clauses allowing them to be altered depending on state appropriations.
“This is just the opening salvo,” Palm said, saying she expects lawmakers won’t adopt a uniform across-the-board cut.
Palm said school districts, after three years in which Georgia’s K-12 funding formula was fully funded, are in a better financial position than they were going into the great recession. But with school districts spending more than 80% of their budgets paying employees, cuts will likely reduce the number of teachers statewide. “It has to,” Palm said.
“In ’21, everyone’s going to feel some pain,” Palm said, unlike in the 2020 budget, when lawmakers and Gov. Brian Kemp mostly protected K-12, universities, technical colleges and Medicaid from cuts that other agencies suffered.
Palm said districts with poorer students are getting larger allotments of federal relief from the coronavirus rescue package and may be able to maneuver to use some of that money to reduce budget cuts. Districts with more affluent student bodies, though, like Forsyth County, are getting less federal money and could feel state budget cuts more deeply.
Also on Friday, some large retail stores and shopping areas that have been closed began reopening, including Arbor Place mall in Douglasville, the Shoppes at River Crossing in Macon, Southlake Mall in Morrow, some outlet centers and all Belk department stores statewide.
Many other large malls and department stores in Georgia plan to reopen Monday or Tuesday, including Atlanta-area retail flagships such as Lenox Square mall and Perimeter Mall, plus all Macy’s and Dillard’s stores statewide.
Some malls are operating with limited hours or without all tenants open. Large mall operators such as Simon Property Group and Brookfield Properties Retail say they’re closing off some or all food court seating and providing hand sanitizer. Simon says it will also provide masks and temperature checks to shoppers who want them.
The AJC Peachtree Road Race, which draws tens of thousands of runners to Atlanta every July 4 for a 10-kilometer course through the heart of the city, has been rescheduled for Thanksgiving, according to an email sent to registered participants by the Atlanta Track Club. Guidance from health experts led to the postponement until Nov. 26, the track club said.
Georgia was initially slow to build testing capacity compared to other states but has been ramping up rapidly. Kemp said Friday that the number of tests being reported to the state had doubled in less than a week, with over 20,000 tests reported on Thursday alone. Kemp’s office announced a free pop-up testing site that will be operating in Decatur on Monday.