He was the final speaker at a three-day conference at the University of Georgia designed to give members of the General Assembly a preview of some of the issues they'll face in the coming legislative session. In years past, governors have used their luncheon speech to outline ambitious agendas.
Deal, though, used the occasion to dampen expectations.
"I must tell you it is a rather daunting budget this year. We have some challenges," he said.
Tax collections decreased last month by nearly 1 percent and for the first five months of the fiscal year are only 3.7 percent higher than last year, which is below the 4 percent rate the current state budget is based on.
The governor has already instructed state agencies to plan to get by with 3 percent less than they were appropriated for this year. That equals the $700 million shortfall in the state's Medicaid system, and Deal said requirements of the federal health reform law will add another $42 million in expenses for the program.
He said that was the reason he rejected the reform law's incentives that were designed to convince states to expand their Medicaid system to cover more people.
"I don't know where anybody would find that money in the state budget," he said.
The chairman of the Senate Appropriations Committee, Jack Hill, described the budget decisions as leaving legislators few choices.
"We're taking money from what we want to do and putting it into what we have to do," said Hill, R-Reidsville.
That's why spending on state parks and road construction shrinks, he said.
His counterpart as chairman of the House Appropriations Committee, Rep. Terry England, gave his colleagues a more folksy image during a closed-door briefing Sunday.
"I told them, the slack is running out of the chain," said England, R-Auburn.
Not only are expenses for healthcare rising while tax collections are weak, but most of the state's reserve funds are too low to cushion against additional cuts, he explained.
Such lean budgets generally mean no pay raises for state workers like teachers, tuition increases for students at state colleges and fee hikes for state services. And Deal is already lobbying legislators to renew a tax on hospitals that was set to expire after three years as a temporary solution to the effects of the last recession.
"This recession just lasted longer than anybody expected," England said.
The governor did discuss a few initiatives Tuesday, mostly programs that will need little from the budget. Among them are using tolls to finance extra lanes on Atlanta highways, revising rules on how educators are evaluated and adding 10 days of annual instruction to the lottery-funded pre-K program.