ATLANTA — A state economist warned Thursday that Georgia’s economy could be heading into a recession, reinforcing the governor’s call for budget cuts.

Gov. Brian Kemp’s directive to slash spending drew the ire of several lawmakers, including fellow Republicans. 

Dr. Jeffrey Dorfman, the governor’s fiscal economist, said he believes there is a “50/50” chance of a 2020 recession.

During the first in a series of joint budget meetings, Dorfam told lawmakers that revenue tracking for fiscal year 2020 is falling short and the state’s economy needs to grow 2.5% to match state revenue from last year.

“It is definitely a reason for concern,” Dorfman said.

Dorfman — as well as the governor’s director of the Office of Budget and Spending — supported a number of controversial budget cuts Gov. Brian Kemp ordered state agencies to make by  end of 2020 fiscal cycle and more into 2021, calling the cuts “prudent.”

“It is clear Governor Kemp’s approach to prepare for a tighter budgetary climate is a correct one,” Dorfman said.

Kelly Farr, director of the Office of Planning and Budget, told a joint hearing of the House and Senate appropriations committees on Friday that the agencies’ cut proposals — that they were required to submit by Sept. 6 — were being reviewed.

Farr said it could mean job cuts, but what he characterized as excessive spending for travel, new technology, vacant positions, among other areas, were higher priorities for reducing costs across the board.

The announcements from the governor’s appointees were met with concern from lawmakers. The stark prediction of a possible recession did not deter questions about specific programs that could be on the chopping block.

The joint budget hearings were scheduled after Kemp ordered state agencies  to cut 4% from their budgets this fiscal year, followed by 6% next year. Cuts could start as early as next week.

“There’s a lot of panic right now….” Rep. Al Williams, D-Midway, a member of the House Appropriations Committee, said. “It affects morale tremendously if a person doesn’t know if they are going to have a job in January.”

“The 4% cuts on certain agencies that the governor is proposing, starting in October, will save the state about 200 million,” Dorfman said. “It is possible that might be enough to keep the budget balanced for FY2020 but it’s possible it might not be enough.”

Senate Appropriations Chairman Jack Hill, R-Reidsville, said that after the first two months of tax collections were $97 million below where they needed to be to pay for the state’s $27.5 billion budget.

“Right now it’s really important to get our heads around where our state’s economy is and where we’re headed,” Hill said in opening remarks.

If Georgia sees a recession next year, Dorfman said, it would be mild — similar to what the country saw in the early 2000s. Nationally, economic growth is at such a low anything could “tip us into recession.”

Dr. John KcKissick, agriculture economist from UGA, said that the agribusiness industry in Georgia is hurting, causing a ripple effect into all the other related businesses it touches.

Stress factors include the continued affects of Hurricane Michael, — affected farmers are just now starting to see federal aid — a shortage in the labor pool and national trade uncertainty as “trade wars” with China and other countries persist.

“If for some reason, policy decisions, regulatory decisions, disasters, if we were to remove that $14 billion of production from our farms,” McKissick said, “then we would remove that roughly $60 billion of added value and we would remove a total of 400,000 jobs. It’s very important to the economy in the state of Georgia.”

Prices for some commodities are at a decade low, he said.

Dr. Michael Toma, economics professor at Georgia Southern University, said that 25% of Georgia’s global trade is with China. But China “basically stopped” buying peanuts from the state at one point in 2018 — as well as a slowdown in pecan buying — which caused significant losses.

From 2017 to 2019, Toma said, the pork industry lost anywhere from $2.5 to $4.5 million a month in exports to China.

Still, lawmakers continued to stress specific programs that should be exempt from the looming budget cuts, including money for a Morehouse University study on maternal mortality in Georgia — which has the highest rates in the nation.

“I want to make sure there is some looking in-depth,” Rep. Darlene Taylor, R-Thomasville, and vice-chair of the House Appropriations Committee, said, “so we don’t overlook the needs of our constituents.”