Georgia: Impact on State Budget from Storms Could be Significant
By Matt Towery
Southern Political Report
Copyright © 2008 Creators Syndicate
March 15, 2008 —
I knew it had to be the Ides of March. Friday night, while fighting a bug that gave me a 100-degree fever, I had to cover the first tornado that I, as a native Atlantan, ever remember hitting downtown Atlanta. I may have not have felt well, but it didn’t take me long to figure out that while I would recover, Georgia might suffer for months to come. Here’s the inside story. Recently, Gov. Sonny Perdue’s office provided the state with revised revenue estimates. In reality, while they were a reduction in terms of projections, they were modest versus the more aggressive approach Perdue’s team could have taken. But Friday’s storm, as was relayed to me by sources early into Saturday morning, had damaged the World Congress Center, the Georgia Dome, and so many other vital venues for tourism and conventions that the combined losses in revenue and the cost of repairs could worsen an already rapidly declining revenue picture for the state. Georgia Insurance Commissioner John Oxendine confirmed by Saturday afternoon that the damage to the Congress Center and Dome alone might exceed $100 million. He suggested total damage to the area could be well over $250 million. Of course the state is “insured,” but it’s not as if your local state representative shows up outside the Dome with a check for $100 million. In order to move quickly, state funds are spent immediately in an effort to get vital convention and tourism facilities operational. The news gets worse. Friday’s announcement that the NY Fed worked with JP Morgan to rescue Bear Stearns, and later news that another major financial institution might be on the ropes, has economists believing the nation is headed into a “Super Recession.” Unemployment numbers in Georgia jumped massively last month, and according to my sources, there may have to be an additional revision downward in Georgia’s revenue projections. Just the lost revenue from scheduled conventions and refunds from the Southeastern Conference basketball tournament cancellation alone will give pause for concern. It appears that Friday’s events, both within the state of Georgia and on Wall Street, may well combine to force thoughts of tax cuts or big expenditures out of the picture for the moment in Georgia. In fact, sources tell me that if additional revisions in revenue projections are not made quickly, a special session of the Georgia legislature may be necessary in the summer to consider additional cuts. Georgia’s “rainy day” fund has been healthy, but those who remember the late 1980s and the first year of Zell Miller’s administration as Georgia’s governor recognize storm clouds when they see them – or after they’ve seen them.
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