Perdue Outlines Huge Cuts and Possible Tax Increases

Georgia homeowners could see their property taxes rise and speeders could face stiffer fines under the state budget plan introduced Wednesday by Governor Perdue.

The proposal fills a $2.2 billion budget hole with some tough cuts and new fees, and teachers and state employees won't get raises.

But the Republican governor also wants to boost borrowing to stimulate the state's economy by creating 20,000 jobs building schools and libraries.

Lawmakers are constitutionally required to approve a budget before their 40-day session ends. They will almost certainly make changes to the budget blueprint.

To avoid deep cuts to the Medicaid program for the state's poorest residents, Perdue said he wants hospitals and health insurance plans to pay a 1.6 percent fee on their net revenues.

The proposal faces opposition from the health care industry as well as some conservative Republicans who have pledged not to raise taxes or fees to plug the budget hole. Health officials argue it could boost the cost of insurance and discourage the sick from seeking treatment.

Perdue would help close the budget gap by eliminating Homeowner Tax Relief Grants the state pays to local governments, which are then passed along to homeowners as tax credits. Their loss could translate into increased property taxes. Lt. Gov. Casey Cagle has pledged to restore the funding.