The Union Recorder

December 10, 2012

Deal seeks contingency plans for fiscal cliff


The Associated Press

ATLANTA — Georgia Gov. Nathan Deal says he has asked his agency heads to come up with contingency plans if federal leaders can't reach agreement to avoid the so-called "fiscal cliff."

Deal said he's not confident an agreement will be reached, The Atlanta Journal-Constitution (http://bit.ly/U9wimM) reported.

The state expects to contribute a portion of the lost federal dollars if agreement is not reached in Washington, Deal's spokesman Brian Robinson said. If no deal is reached, the state is planning to spend $24 million to "strategically target essential programs, such as those that represent a life or safety need for Georgians," Robinson said.

Going over the "fiscal cliff" would mean less academic support for at-risk schoolchildren and fewer meals for low-income seniors, among other repercussions for cuts in most federal programs, the Journal-Constitution reported.

In Georgia, state agencies and local school boards are preparing for the likelihood that across-the-board cuts will go through at year's end as part of a package of expiring policy that includes several tax increases. With just three weeks until the tax hikes and spending cuts start taking effect, it's far from certain whether leaders in Washington can hammer out a deal.

"I am not confident at all," Deal said in a telephone interview. "I think we very well could go into a situation where the (George W. Bush-era) tax cuts expire and we go into the first of next year with increased rates and the rest of the issues not being resolved."

The cuts constitute a relatively small portion of Georgia's budget, which is $19.3 billion this year.

Robinson said more details will be provided when the governor's office releases its budget in January, and by then the state will likely have a better idea of what federal cuts are on the line.

The scheduled cuts due in January would remove $104 million from Georgia's coffers, posing a challenge in writing the fiscal 2014 budget. Local school districts would lose out on federal grant money. Under the Budget Control Act, most non-military federal programs face an 8.3 percent cut. Much of the military is scheduled for a 9.4 percent cut.

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