The state's lingering fiscal crisis and its potential impact on city governments is on the minds of Cherokee County's mayors and council members.

The Cherokee Municipal Association this week heard an update from the Georgia Municipal Association regarding expectations for the General Assembly's 2010 legislative session.

Paul Radford, deputy director of external affairs for GMA, said cities need to be aware of how the state's projected budget deficit will impact local municipalities.

According to the Georgia Budget and Policy Institute, the state closed a $3.3 million gap in its $18.8 billion budget for 2010 by using federal stimulus dollars, $500 million in various reserve funds and cutting about $15 billion from state agencies.

As expenditures are expected to increase by $1 billion because of employee salary increases, state agency caseload increases and continuing inflation, the institute is predicting the state will face at least a $823 million shortfall for the 2011 fiscal year.

The problem becomes more bleak as federal stimulus dollars begin to dry up in 2012, with the institute projecting a deficit as high as $3 billion.

Radford, who described the looming problem as "very serious," said there are numerous programs cities use each year that could be on the chopping block.

He predicted cuts in programs such as the Georgia Environmental Facilities Authority, which provides cities and counties with low-interest loans to make water and sewer infrastructure improvements.

Those cuts, he said, could force local governments, already cash-strapped, to seek other places for funding.

"They are looking under every rock to fill in gaps," he said of state budget writers.

He also said legislators' efforts to replace the ad valorem tax on cars with a one-time title fee of 7 percent also could affect local government operations, he said.

"It would hurt us if it doesn't generate enough money," he said, adding schools would be impacted the worst by the change.

Canton Mayor Gene Hobgood said he's concerned about the budget crisis as the state will have a more difficult time as the deficit is predicted to grow.

"That'll be the same for us as well," he said of the trickledown effect.

Hobgood said he's also worried about plans to create a regional 1-percent sales tax to fund transportation projects.

He instead favors a statewide 1-percent sales tax because Cherokee County "may not get our fair share" within the 10-county metro Atlanta region.

He said he also worries the state Department of Transportation, under the regional plan, could redistribute money to smaller counties instead of keeping it in metro Atlanta.

Woodstock City Councilman Steve Faris asked Radford if there are plans to change impact fee laws.

Radford said he expects developers, who are already facing harsh financial troubles, to lobby legislators to have impact fees and other development process fees waived at the local level. This, he said, could hurt cities and counties that already are suffering from a decline in permits.

Ball Ground Mayor Rick Roberts said he's hoping legislators figure out a solution to the crisis without hurting local governments.

"They will have to make some tough decisions," he said.

Waleska City Councilwoman Mary Helen Lamb said she anticipates the budget crisis will dominate the legislative session.

She stopped short of speculating as to how the crisis could affect Waleska's operations.

"I think everyone in the room knows what'll be coming, though," she said.