Tax collections are still in freefall, meaning legislators will need to get to work immediately hacking what could be another $1 billion or so from the $18.6 billion state budget.
The scandal that brought down the state's powerful House speaker suggests ethics reform - and bad behavior - will be a hot topic in the frenzy of an election year.
Water could be running out for Atlanta. And traffic gridlock just keeps getting worse without a deal on how to pay for road improvements.
It's a doom-and-gloom scenario at the gold dome.
Money - or the lack of it - is expected to dominate the 40-day legislative session. Revenues in Georgia for the fiscal year that began July 1 are lagging 14 percent behind what they had been the year before. That's a drop of more than $1 billion. Georgia's Republican leaders have pledged not to raise taxes, so they are left with only one choice: cut deeper. Georgia's constitution bans state officials from running a budget deficit.
New cuts would strain a state that is already struggling. Child welfare caseworkers and teachers are among the thousands of state workers wrestling with unpaid furlough days. There's growing backlog in civil court cases and delays in thousands of criminal cases. State parks have scaled back their hours. Prisons are growing more crowded.
The budget has already shrunk as money flowing into state coffers from sales, income and corporate taxes has dropped off as the economy has soured. Flush with cash, the state budget stood at $21.2 billion in 2008. It's shriveled to $18.6 billion and is expected to drop at least another $1 billion.
"It's calamitous," state Sen. Jack Hill, chairman of the Senate Appropriations Committee, said.
Hill said the steep drop in revenues "is like falling off a cliff."
Perdue has already ordered about $900 million in cuts to the budget for the fiscal year that began July 1, telling state agencies to tighten their belts yet again.
Unless tax collections pick up - which is unlikely anytime soon - those cuts will have to go even deeper.
And the budget for fiscal year 2011, which begins in July, could be even worse as some of the state's federal stimulus dollars begin to dry up.
Perdue reported on Friday that revenues in December dropped 5.8 percent from the same month the year before, the 13th straight month that tax collections have declined.
State Republican leaders are pledging to protect education and public safety from the budget ax as much as they can. But they acknowledge even those priorities will not be immune from cuts.
On the water front, legislators are expected to get moving on various conservation measures recommended by the Governor's Water Contingency Task Force. A federal judge ruled last summer that Atlanta had few rights to Lake Lanier, the main source of water for the sprawling metropolitan area. He gave officials until 2012 to strike a deal Florida and Alabama, which also depend on Lake Lanier for water and are battling for rights to the federal reservoir.
The governor's panel late year urged state legislators to tie water conservation requirements to state permits and devote more funding to water-efficient rebate programs.
It's unclear yet whether they governor will try to find money in the bare-bones budget to build more reservoirs.
Legislators will also be looking to break a stalemate on transportation funding to help with metro Atlanta's nagging traffic troubles. Last year the House and Senate deadlocked over competing funding plans. Each would have required voters to approve a one-cent sales tax hike to fund transportation improvements. But House leaders backed a statewide plan while the state Senate favors a regional approach.
But with most of the House leadership team now gone, that impasse could finally end and a funding proposal could be on the ballot for voters in November.
"We are very optimistic this year," George Israel, president of the Georgia Chamber of Commerce said.
Ethics wasn't expected to receive much attention this session. But that all changed at the end of last year as House Speaker Glenn Richardson's messy fall from power after a suicide try and allegations of an affair with a utility lobbyist grabbed headlines.
Now, some say that it's critical for the state's ruling Republicans to take on ethics or they could suffer at the ballot box.
"They ignore this at their peril," Emory University political science professor Andra Gillespie said. "This is the party that has made family values a priority."
Already House Minority Leader DuBose Porter, a candidate for governor, has unveiled legislation with his Democratic colleagues to toughen ethics laws by giving the state Ethics Commission oversight of conflict of interest complaints against legislators. Currently, lawmakers police themselves.
State Rep. Joe Wilkinson, chairman of the House Ethics Committee, said a cap on gifts for state lawmakers might be on the table. Right now, there is no limit on what a lobbyist may spend entertaining a lawmaker as long as they report it. Another possibility is having lobbyists make more timely reports on what they spend entertaining legislators during the session.