Governor Perdue is proposing a 10.25 percent cut to Medicaid reimbursement rates as an alternative to taxing hospitals 1.6 percent.

For two south Georgia hospitals, this would mean having to scale back.

"It's gonna hurt our employees because they may not get raises, because of this cut," said Shamb Purohit, the CFO of Smith Northview Hospital. "It's gonna hurt our hospital expense."

"Building projects and capital improvements and equipment purchases may have to be delayed," said James McGahee, the CEO of South Georgia Medical Center.

According to the Office of Budget and Planning's preliminary estimates, Smith Northview Hospital would fall short of around $660,000 a year if Medicaid cuts go into effect. And South Georgia Medical Center would be out $3.02 million a year.

But if the hospital tax is signed into law, both medical centers would lose less: Smith Northview would be taxed $200,522 and South Georgia Medical Center, $2.7 million.

"There's really no good option out there when you have state revenues down as far as they are," said Bert Brantley, with Governor Sonny Perdue's Office.

Thursday's revised budget revealed a shortfall of $342 million for this year's budget alone.

And for the next fiscal year, starting July 1, another $443 million.

"It's time for particularly the hospitals in the state to understand they have not taken a rate cut during these budget times," said Brantley. "We've had teachers on furlough, state employees have been furloughed."

Whether it's Medicaid cuts or a hospital tax that's decided, cuts to Georgia hospitals may be imminent.

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For now, the decision lies with the Georgia Hospital Association, whose next step will be to lobby the legislature.

And they'll have to decide soon since we're approaching the end of the legislative session.

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*The Office of Planning and Budget has not yet released its official 10.25 percent Medicaid rate cut estimates for Georgia hospitals.