UPDATED

State Worker Raises On Hold, New Hiring Curtailed

Update at 11:07 a.m. adds quote from OPB director and link. New material highlighted.

By Dick Pettys
InsiderAdvantage Georgia

(8/4/08) State agencies have been told to suspend new or replacement hiring, to stop buying motor vehicles and to eliminate non-essential travel to help the state offset an expected $1.6 billion budget deficit.

In addition, state employee raises have been deferred “until further notice” and state employee layoffs or furloughs have not been ruled out.

The orders went out Friday, shortly after a telephone conference between Gov. Sonny Perdue and top legislative leaders over his plans for managing the problem. The consensus was that he has the tools necessary to manage until lawmakers return to session in January. In other words: no special session.

The management plan includes holding back 6 percent of agency allotments for the foreseeable future (except for QBE and Medicaid, which won’t be hit as hard) and putting at least a temporary freeze on the homeowners’ tax relief plan, a $428 million state program designed to partially offset assessment creep in local property taxes.

In addition, agencies have been told to prepare budgets anticipating cuts of as much as 10 percent.

Instructions sent to the agencies Friday by the Office of Planning and Budget spelled out the additional instructions, including orders for agencies to curtail purchases of supplies, equipment and printing services.

While teacher pay raises appear safe, since most of those contracts for next school year already have been signed, state worker pay raises – due to take effect Jan. 1 – will be put on hold, the memo said. Perdue had indicated he was considering that step with the idea of making state workers whole later on.

There has been no public mention yet of layoffs or furloughs, although with the depth of this shortfall (the $900 million rainy day fund notwithstanding), some budget watchers believe it is only a matter of time until one or the other is brought into play.

Gov. Zell Miller gave the axe to 800 employees in 1991 during that year’s budget crunch.

The following year, he put 800 jobs back into the budget, but not in the same places.
Some state agencies also have employed furloughs in the past.

OPB Director Trey Childress said he expects "agency reduction" plans will be part of the proposals some departments submit for meeting the 6, 8 and 10 percent cuts. "We have not ruled that out," he said. The governor would then evaluate any such proposal.

Here is the text of the memo sent Friday.