KATHY LOHR: I'm Kathy Lohr in Atlanta, and things here are not as bad as in New York. But Georgia is struggling with at least a $1.3 billion shortfall and the new republican governor, Nathan Deal, is not downplaying the tough times.
NATHAN DEAL: Many politicians have long talked about reducing the size of government. My friends, we are doing it.
(SOUNDBITE OF APPLAUSE)
LOHR: During the State of the State address, the governor said he would eliminate some 14,000 vacant jobs. He's also calling for state agencies to reduce budgets by an average of 7 percent. That means cuts to higher education, Medicaid and services for the elderly. But Deal says there's no other way.
DEAL: Our state's fortunes do not rise or fall on the size of state government.
LOHR: Alan Essig with the Georgia Budget and Policy Institute says that's caused a kind of budget fatigue here.
ALAN ESSIG: It's not specifically the impact of this one budget but it's the cumulative effect of the last three years' worth of budget cuts that is really the big issue that faces Georgia.
LOHR: This year, legislators are talking about revamping the state tax code and perhaps even bringing back a tax on groceries. Some do want to reduce the overall tax rate, but Essig says in the past lawmakers were unwilling to raise taxes.
ESSIG: What we need is a more balanced approach in Georgia. We've depended almost entirely on budget cuts to balance our budgets and we can't cut our way to prosperity.
LOHR: Kathy Lohr, NPR News, Atlanta.
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