With tax collections continuing to slide, legislators will take a break from passing bills in the House and the Senate. Instead, budget writers will huddle to address another $1 billion-plus budget shortfall.
Legislators said they were caught off guard by yet another dismal revenue report last month. There had been hopes that January would break a slump in tax collections. Instead, they dipped 8.7 percent, the 14th straight month revenues have declined.
Some lawmakers grumbled that the forecast for the fiscal year that begins July 1 could be even bleaker than originally thought.
"I think $1 billion may be on the low side," state Senate Majority Leader Chip Rogers said Thursday of the budget hole.
Gov. Sonny Perdue has proposed a $18.2 billion budget for the coming fiscal year. He projected 4 percent revenue growth, which some now say may be far too optimistic.
The governor balanced the budget by proposing a pair of unpopular proposals: a tax on hospitals and health plans and siphoning money from the state's environmental loan fund.
Republican legislators have been cool to both plans, particularly the hospital fee. Perdue has said it's needed to avoid deep cuts to Medicaid. But many of the state's ruling Republicans have pledged to balance the budget without hiking taxes.
Together the two proposals are expected to bring in roughly $650 million. If legislators reject the proposals they either have to make cuts in that amount or find additional revenue to fill the hole.
Georgia is required by law to balance its budget.
In addition, federal stimulus dollars for Medicaid are set to dry up midway through the year. Unless Congress delivers additional money from Washington, that will be a hit of some $380 million.
House and Senate budget writers will meet together next week to tackle the budget, a first at the Capitol - where the two chambers typically craft budget plans separately and then hammer out their differences.
"We have a difficult, difficult budget task ahead of us," House Majority Leader Jerry Keen said.
House Speaker David Ralston said that Appropriations and only three other committees - Transportation, Natural Resources and Ways and Means - are authorized to meet during the next two weeks. No other members are authorized to receive the $173 per diem for legislative work days, Ralston said.
Also on Thursday, the state Senate approved a $17.4 billion midyear spending plan that forces most state employees and teachers to take three more unpaid furlough days. That budget covers the remainder of the fiscal year that ends June 30.
It cuts $1.2 billion in spending to keep pace with plunging revenues. Tax collections have declined for 14 straight months. Most state agencies have been hit with cuts of about 8 percent. Mental hospitals, which are under fire from the U.S. Department of Justice, received one of the only spending increases.
The budget passed 44-6 on Thursday. It must now return to the House to iron out differences with the version that passed in that chamber last week.