Governor Sonny Perdue has reduced the expected state revenue for next year by $442 million dollars. Most of the cuts will come to hospitals and doctors who treat Medicaid patients.
The Governor has abandoned his idea of a 1.6 percent fee on hospitals after they lobbied hard against the idea. Instead they will get less money for treating the poor.
"We've agreed to remove the provider fee and take the alternate recourse that it outlined at the beginning of the budgeting process, which is reducing reimbursement rates," Perdue says.
Doctors and Hospitals who treat the poor would get a 10.25 percent cut from Medicaid. Perdue also wants to eliminate a sales tax exemption for non-profit hospitals that would raise 120 million dollars.
Jimmy Lewis represents about 20 rural hospitals. He says the cuts would be too much.
"Rural hospitals are in deep trouble and significant cuts would put them out of business."
Perdue says he does not favor a tobacco tax to help hospitals.
"Frankly, the hospital community has not been fair with the citizens of Georgia. They have not addressed the issue the way I have to address this with a balanced budget," he says "They've offered no ideas than cut them and raise money elsewhere and that's unacceptable."
To balance the budge next year many fees will go up. That will amount to 92 million extra dollars to the state. Some state agencies will get an additional 3 percent cut next year, but not K-12 education, higher education, public safety and community health.
The Board of Regents will still get a cut of $120 million, however. That money was to account for an increase in enrollment.
In order to meet the budget requirements for this fiscal year, the governor will pull $342 million dollars in federal stimulus dollars from next year's budget into this year.