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Deal: Agenda trimmed back because of budget

Published on NewsOK Modified: January 22, 2013 at 5:05 pm •  Published: January 22, 2013

The Republican also asked lawmakers to support legislation that would authorize the Board of Community Health to levy a tax on hospitals that is set to expire this year. The tax, which raises roughly $230 million annually, is used as state matching money to secure another $400 million-plus of federal support for the Medicaid program. The money is then paid back to the hospitals in the form a higher payment rate for treating Medicaid patients.

"We cannot afford to have a $700 million hole in our Medicaid budget," Deal said.

It may take until 2014 before Georgia receives as much tax revenue as it did before the Great Recession, which started in late 2007, said Kenneth Heaghney, a Georgia State University professor who serves as the state's fiscal economist.

Growth in Georgia's labor market has started outperforming the rest of the country, the housing market shows signs of improvement and some of the state's most important sectors — information technology, professional and business services, and manufacturing — are growing. But consumer spending is subdued and business investment has slowed.

He cautioned lawmakers that increasing federal taxes, a sluggish global growth and uncertainty over federal spending policy could constrain economic growth in Georgia.

"So all of this creates an environment in which there's still a lot of economic uncertainty," Heaghney said. "And so we try to plan for that, but there's a lot of different ways the economy could move depending on how these three areas play out over time."


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