Georgia state budget


Georgia
Annual
Fiscal Year	2013
Signed into law	May 7, 2012
GF Revenue

Georgia Gov. Nathan Deal signed the $19.3 billion FY2013 state spending plan into law on May 7, 2012.^[1]

Georgia has a total state debt of approximately $97,478,050,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. ^[2]

See also: The Georgia State Budget on State Budget Solutions

2011 State spending & deficit in billions^[3]
Total spending	Education	Health care	Protection	Departments	Agriculture	Debt management
$17.8	$10.3	$3.3	$1.4	$.75	$.76	$1.1

2011 Local spending & deficit in billions^[4]
Total spending	Pension	Health care	Education	Welfare	Protection	Transport	Deficit
$58	$0.3	$4.7	$18.8	$1.2	$4.3	$3.2	$51.2

[edit] FY2013 State Budget

Gov. Nathan Deal signed the state budget into law on May 7, 2012.^[1] He vetoed some items, including:

an appropriation of $1.75 million to cover a weight-loss surgery benefit in the state's health plan;^[1]
$500,000 for small-town airports;^[1]
$256,800 for renovation of the Rural Development Center at the University of Georgia's campus in Tifton. The governor noted that the project was not sought by the Board of Regents and did not appear on the board's list of priorities for capital projects.^[1]

The general fund is $19.3 billion, and total state and federal spending totals more than $39 billion.^[1]

Legislative Proposed Budget

A conference committee comprised of members from both chambers negotiated a compromise budget.^[5] On March 27, 2012, the General Assembly approved the negotiated $19.3 billion state general fund budget, with the Senate doing so by a vote of 45-0 and the House vote of 143-24.^[6] All budgets together spend about $39.5 billion overall, including federal tax money.^[6] The spending plan puts $111 million -- much of it from the national mortgage lawsuit settlement -- into new economic development efforts.^[6]

Items cut from the budget include:

$750,000 for a state history museum;
redirecting $10 million earlier approved for the College Football Hall of Fame to other projects.^[6]

On March 21, 2012, the Senate unanimously passed its $19.2 billion version of the FY2013 state budget. The state would borrow about $800 million for construction projects under the Senate plan. The Senate also had a provision changing the HOPE scholarship fund, which the budgets from the governor and House did not address.^[5]

The House approved its draft of the budget on March 6, 2012. The House plan was similar to the governor's proposed budget, but included additional funding for education and increased the fuel funds for the Georgia State Patrol. The House did not go along with Deal's plan giving local school leaders the ability to spend nearly $16 million earmarked for student nutrition programs on other aspects of schooling.^[7]

Governor's Proposed Budget

The Governor's Budget Report can be found here.

The budget increases spending from $18.3 billion in FY2012 to $19 billion in FY2013. “When adjusted for inflation per capita spending in my budget recommendation for fiscal year 2013 is 20.5 percent less than Fiscal Year 2002,” Deal said. ^[8]

Gov. Nathan Deal's proposed FY2013 budget would include consolidating some state agencies.^[9] Deal's proposed budget includes expenditures of $19.2 billion.^[10] Highlights of the budget include:

$89 million is earmarked to fund higher enrollment in Georgia's public elementary, middle and high schools;^[10]
$235.6 million to the University System of Georgia for new construction, renovation projects and equipment purchases;^[11]
$60 million has been set aside for teacher raises;^[12]
elimination of the State Personnel Administration.^[10]

Gov. Deal said he hopes to expand his use of zero-based budgeting in FY2013.^[10]

The governor also proposed eliminating the sales tax on energy used in manufacturing.^[13]

[edit] FY2012 State Budget

See past state budgets

The state will receive $815 million from banks to settle foreclosure fraud claims, and Gov. Nathan Deal has said that he would put that money towards the state's Rainy Day Fund instead of its of to homeowners. When the governor's administration made this clear in March 2012, the Rainy Day Fund had approximately $320 million.^[14]

[edit] Passed Budget

Gov. Deal signed the $18.3 billion FY2012 budget on May 17, 2011. The budget increases health insurance premiums for state employees and cuts funding for Georgia's college system. The governor used his line item veto power to strike funding for 11 $40 million bond projects in the university system. ^[15] The governor's veto statements can be found here.

On Feb. 3, 2012, the Georgia House passed an amended budget to increase state spending by $255 million over what was originally planned. The amended budget calls for a $300 million for a toll road project along I-75 and I-575 in Cobb and Cherokee counties and for additional federal spending.^[16]

The FY2012 budget contains no cost-of-living raises for 200,000 teachers and state employees and cuts university system funding. Public school funding will be about the same as it was this year, when many school districts furloughed employees and cut the number of school days to save money.^[17]

The budget also includes fee increases, including higher costs for day care licenses, fireworks permits and traveling circuses.^[18]

Georgia's annual debt service is $1.2 billion, which is approximately 7 percent of the state's budget. The state has $9.2 billion in outstanding bonds on its books as of Sept. 2011, and Gov. Deal has reduced state bonding to $563 million from $1 billion the prior year.^[19]

Tobacco Settlement

The state received $138.4 million in FY2012 from a settlement fund with tobacco companies. The money was divided up among a variety of state agencies, including: ^[14]

$7.6 million to the Department of Economic Development
$6.1 million to the Department of Human Services, which handles programs such as child welfare and daycare licensing
$12 million to the Department of Public Health, which pays for epidemiology and other programs,
more than $100 million to Medicaid.

Other years, the tobacco settlement money has helped pay for 911 services, broadband communications and technical colleges. ^[14]

[edit] Governor's Proposed Budget

The governor had originally proposed a FY2012 budget totaling $18.16 billion, an increase of $273 million over FY2011. ^[20]

In order to focus more on K-12 education, state university programs would see their funding cut about $300 million, down to a total of $1.74 billion for FY2012, over the next 18 months under Deal’s amended 2011 and 2012 budgets.^[20] In addition Deal's plan would not seek to fill more than 8,000 positions that are currently vacant. His proposal includes $276 million less for HOPE scholarships, which pay for Georgia high school students with grade point averages of at least 3.0 to attend college. Rather, Deal wants to divide the lottery money earmarked for scholarships equally among qualified students. ^[21]

Deal's spending plan eliminates dental and vision benefits for low-income Medicaid recipients and cuts the state's Medicaid reimbursement rate for physicians, dentists and pharmacies by 1 percent. His budget would also boost co-payments for children age 6 and up enrolled in the state's PeachCare program for low-income children Those copays would rise from 60 cents to $3.40 for outpatient services and $12.50 to a maximum of $55.45 for inpatient. ^[22]

Borrowing for capital projects would drop by about 50 percent to $563 million under Deal's proposal. His budget also cut allocations to the Georgia Research Alliance by $12.5 million.^[23]

Highlights of the budget include^[20]:

$46 million for reservoirs
$32 million for deepening Savannah harbor
$25 million for school buses
More than $200 million for k-12 school construction
Higher co-payments for many Georgians on the PeachCare health care program
$300 million in cuts to the University System funding over 18 months

Deal said that Georgia is in arrears to the federal government for $454 million in loans to its Unemployment Trust Fund and is due to repay those funds in November 2011.^[24]

[edit] Legislative Budget

House and Senate negotiators approved an $18.3 billion state budget deal on April 12, 2011,^[25] and was approved by the General Assembly later that same day.^[26] The deal is similar to the governor's proposed budget. Lawmakers agreed to raise premiums at least 10% and borrow from Medicaid to make up for a shortfall in the state health care plan for teachers, state employees and retirees. While higher education cuts will likely mean substantial tuition increases, funding for K-12 schools will remains the same as the prior year. Georgia would borrow about $675 million for construction projects next year.^[25] The budget includes approximately $18 million to pay the interest on federal government to loans to the state for unemployment claims during the recession. It also provides almost $4 million to pay for a special session lawmakers will hold later this year to draw congressional and legislative political boundaries based on the 2010 census.^[26]

Georgia has slashed some $3 billion in state funds from the budget over the last three years. ^[27]

The budget that legislators passed last week has a $200 million to $300 million hole that needs to be filled to fund two health care plans.^[28]

Lawmakers plan to review spending on K-12 education, higher education and correction, which together account for approximately 60% of the budget, over the summer.^[28]

[edit] Negotiations

Prior to passage of the agreed upon bill, there were competing legislative proposals. The legislature did not pass a 25% reduction in the state income tax rate.^[28]

The House had proposed a 20 percent jump in insurance premiums for state employees. The 20 percent increase will mean employees must pay an additional $15 to $80 a month, depending on the plan the employee is enrolled in.^[29] The House also restored more than $7 million for vision, dental and podiatry care for low-income Medicaid recipients that were eliminated in Deal's budget proposal.^[30]

Highlights of the House budget plan include^[31]

Restores vision, dental and podiatry coverage for Medicaid recipients that Deal had proposed eliminating.
Scales back a planned cut in reimbursement rates to physicians who treat Medicaid patients.
Reduces a proposed cut to school nurses from 10 percent to 4 percent.
Restores money for 138,000 meals for senior citizens through the Meals on Wheels program.
Boosts health-insurance premiums for state employees, teachers, state retirees and their dependents by 20 percent to help fill a $250 million shortfall.

After shifting to the state Senate, on March 28 the Senate Appropriations Committee unanimously approved their own version of an $18.3 billion spending plan. The committee added $22.6 million to the Department of Revenue’s fiscal 2012 budget and much smaller amounts to the Secretary of State’s office and Department of Driver Services. ^[32] The Senate budget plan would spend about $23.4 million on auditors, field and fraud officers, collection officials and others at the Department of Revenue to increase tax collections and improve customer service. The Senate plan borrows from Medicaid to fill a gap in the state employee and retirees health care plan. ^[33]

[edit] Budget transparency

Find sample transparency legislation at the Sunshine Standard

Georgia's constitution and laws do not provide for a given period of time to review bills so that lawmakers and citizens can review them prior to lawmakers voting upon them.

The state's official spending transparency database, mandated by the Transparency in Government Act of May 2008, was launched by January 2009. It is available here.

[edit] Legislation

Georgia Senate Bill 300 (2008), Transparency in Government Act

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

**Criteria for evaluating spending databases**
State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Open Georgia	P	N	N	N	Y	Y

The website has categorical navigation functions, such as for "Salaries and Travel Reimbursements," and "Other Expenditure Information," but is not searchable outside these prescribed categories.
Expenditures information only contains payments to vendors, and is not up to date.^[34]
Grant information is not available.
Contract information is not available.
Budgetary compliance reports, containing agency and department budgets, are published.^[35]
The site has a search for public employee salaries.^[36]

[edit] Independent transparency sites

The Georgia Public Policy Foundation has launched a transparency website, the Georgia Report Card for Parents, that focuses on school spending.

[edit] FY 2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

Lawmakers approved a $17.9 billion budget for FY2011 which was signed into law in June 8 2010, prior to the start of the fiscal year on July 1, 2010.^[37] Many cuts were made to the state budget as tax collections tumbled 9% in FY2010 as a result of the recession. Although the budget was balanced, lawmakers drafted it assuming that Congress would approve $375 million in funds.^[38] Congress approved H.R. 1586, and Georgia will receive $550 million of a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[39] Before the funds were approved, Gov. Sonny Perdue made additional budget cuts, ordering state agencies to reduce spending by another 4%. He exempted K-12 schools but not the university system from the cuts. Officials have cut the state budget by more than $3 billion during the past two years.^[40]

Gov. Deal proposed a mid-year budget on Jan. 13, 2011, which would increase spending by $163 million. with the increase coming mostly from reserves to fund increases in school enrollment.. Deal also said he planned to cut 14,000 positions, most of which were vacant at the time of the announcement, meaning few state workers will actually be laid off.^[20]

Georgia's $17.9 billion state budget for FY2011 which begins on July 1, 2010, was passed on time and signed on June 9, 2010, by then-Gov. Sonny Perdue after much wrangling in the state legislature.^[41] The FY2011 appropriations bill that the governor signed into law was House Bill 948, the text of which can be found as signed here. One key part of the budget was contained in House Bill 307, which would impose a 1.45 percent bed tax on hospitals^[42] and generates $216 million, funds which are critical to balancing the state's budget.^[43] State agencies cut their budgets by 4%.^[44]

[edit] Tax revenues

The state's tax revenues increased in the first two months of the fiscal year, with August 2010 showing a double-digit gain in tax collections over the same month last year.^[44] Individual state income tax collections rose 24% over August 2009, a gain of nearly $120 million.^[44] The state budget plan is based on a 4% growth in tax collections, so the budget remains mostly on track with tax collections up 3.3%.^[44] Perdue spokesman Bert Brantley said that the modest growth "matches our revenue estimate for the year."^[44] In August 2010, the Department of Revenue said receipts totaled were $1.185 billion compared to the $1.052 billion in August 2009.^[45]

Despite two good months of sales tax revenue,the state's tax design doesn't bring in enough money to pay all of the expenses of state government, leading financial experts to predicted that the state will come up short $1.5 billion to $2.1 billion during each year well past fiscal year 2015.^[46]

[edit] Federal Funds

The amount of state aid approved by Congress in August 2010 would include for Georgia $234 million in Medicaid-related funding and $322 million in education funding.^[47] The extent to which that money would have an immediate impact, however, is unclear. The budget for the 2010-2011 school year is already set, and no further education layoffs are planned, said spokesman for the governor Bert Brantley. He also said that the 4% across-the-board budget cuts for state agencies would continue and that the federal funding would be most useful if the state can keep it until 2012, when other federal funds will run out. ^[47]

[edit] Additional Cuts

Three weeks into the fiscal year, Gov. Perdue ordered state agencies to cut an additional 4% because Congress had not yet approved $375 in federal funding which the budget drafters presumed would arrive. The governor ordered the cuts preemptively and estimated it would reduce state spending by $25.5 million per month.^[40]^[48]

The governor ordered the university system to comply with the cuts, but exempted K-12 education.^[40]

The latest cuts could mean furloughs for more state employees. While some of the state workers were taking days off without pay before the cuts, many more may have to do so under the governor's order.^[40]

[edit] Passage of the Budget Bill

On April 13, 2010, the House of Representatives budget committee passed a $17.7 billion state budget for FY2011 that would cut spending about $500 million below what Gov. Sonny Perdue recommended three months prior.^[49] The budget, with cuts state agencies across the board, adds a 1.45 percent tax on Georgia hospitals’ net revenues and moves more than $300 million in federal stimulus dollars from Georgia’s k-12 education program and university system into this year’s budget to plug a shortfall^[49], but also includes $10 million to help fund the relocation of the College Football Hall of Fame to Atlanta, was approved by the House.^[50]

The Georgia State Senate approved $17.8 billion budget by a 49-2 vote a $17.8 billion FY2011 budget on April 21, 2010.^[5] The Senate restored nearly $900,000 to the budget to fund the Georgia Arts Council^[5], the elimination of which in the House's version triggered protests.^[51]

The full House and Senate approved the $17.9 billion budget on April 29, 2010, the last day of the legislative session.^[52] Gov. Perdue signed the budget on [SC|June 9, 2010]. Due to declining state revenues, the FY2011 budget is more than $300 million smaller than the budget Perdue recommended to the legislature in January, a reflection of continuing recession-driven declines in state tax collections.^[5]

The budget includes two revenue generating proposals: (1) a 1.45 percent tax on Georgia hospitals’ net revenues and (2)increases in approximately 80 fees for assorted state services. Together, the two measures would increase state revenues by about $275 million.^[5] Another revenue generator is the provision for the sale of most of a state bond program used to help underwrite local water and sewer projects, which would raise $300 million.^[5]^[1]

The budget includes $42 million for increased staffing at state mental hospitals and programs run by the Georgia Department of Behavioral Health. It also contains a bond package of $858 million, with $393 million for equipment and building projects for Georgia schools and $200 million meant for transportation projects.^[1]

The governor vetoed bond funding for five projects, including $6.4 million for road improvements on the campus of [www.kennesaw.edu/ Kennesaw State University], because he said the affected state agency did not requested the funding or the project should have been funded through a different department.^[1]

[edit] Budget Background

The 2009 Georgia General Assembly Session's $3.1 billion budget adjustments for FY 2010 were:^[53]

Cutting $800 million from state agencies
Eliminating the Homeowners Tax Relief Grant raising $428 million
Using $1.4 billion from the federal State Fiscal Stabilization Fund and an increased federal Medicaid match (ARRA funds)
Using $500 million in various reserve funds

During FY 2009, revenues declined 10.5 percent from FY 2008 levels. This resulted in a FY 2009 budget shortfall of approximately $650 million. Lawmakers closed the shortfall by using approximately $365 million of the remaining Revenue Shortfall Reserve funds, approximately $190 million in ARRA funds, and end-of-year budget savings.^[53]

Top 2 sources of revenue are individual income taxes, $8.2 billion (anemic increase of .2% in FY 2010) and Sales & Use Taxes, $5.2 billion (-4.0% in FY 2010).^[53]

Total State Funds^[53]

FY 2009 Amended Revenue	FY 2010 Estimated Revenue	Percentage Change
$18,629,356,585	$18,569,866,489	-0.3%

FY 2010 Total State Funds Budget (Includes Lottery Funds and Tobacco Funds) Funding Area^[54]

Education	58.1%
Health and Social Services	10.0%
Criminal Justice	9.1%
Medicaid and PeachCare	8.9%
Debt Service	6.1%
Transportation	3.8%
All Other Government	4.0%

Georgia's fiscal year runs from July 1 to June 30. The Governor submits the budget to the Legislature in January for their annual session.^[55]

[edit] Budget Processes

The House in January 2011 approved a budget reform bill based on zero-based budgeting, which requires state agencies to justify all of the expenditures each year as opposed to the current system under which department heads need only required to explain their requests for budget increases. The legislature approved zero-based budgeting before, but the measure died repeatedly on then-Gov. Sonny Perdue's desk.^[56]

[edit] Budget figures

The following table provides a history of Georgia's expenditures and gross domestic product (GDP).

Fiscal Year	Expenditures (billions)	GDP (billions)
2000	$43.5 ^[57]	$290.9 ^[57]
2001	$48.6 ^[57]	$299.4 ^[57]
2002	$53.6 ^[57]	$306.7 ^[57]
2003	$56.0 ^[57]	$317.9 ^[57]
2004	$58.4 ^[57]	$338.5 ^[57]
2005	$58.9 ^[57]	$359.7 ^[57]
2006	$63.0 ^[57]	$376.4 ^[57]
2007	$72.6 ^[57]	$396.5 ^[57]
2008	$81.2 ^[57]	$409.6 ^[57]
2009	$90.7* ^[57]	$408.9* ^[57]

NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

See Georgia state budget (2008-2009) for more details.

[edit] Accounting Principles

Main article: Georgia government accounting principles

The Georgia State Accounting Office was established on October 6, 2004 with an executive order signed by Governor Sonny Perdue. Governor Perdue signed House Bill 293, which codifies the realignment of the state's financial reporting and financial system responsibilities under a single State Accounting Officer (SAO). Greg Griffin was appointed Georgia's State Accounting Officer in August 2008. The State Accounting Office is responsible for the following duties:^[58]

Establish statewide accounting and reporting standards and practices.
Operate and improve statewide financial and human capital management systems.
Prepare the state's Comprehensive Annual Financial Report (CAFR); the annual audited financial statement for the entire state entity.
Provide statewide financial information on interim basis.
Train state accounting and payroll personnel in new polices, procedures and standards.
Improve accountability, efficiencies and internal controls.

The Georgia Department of Audits is responsible for state finanical accountability. The State Auditor is Russell Hinton.^[59]

The Institute for Truth in Accounting (IFTA) rates Georgia “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Georgia’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[60] Georgia's CAFRs are published online by the Georgia Department of Audits.^[59]

[edit] Stimulus

Georgia has received $4.1 billion in federal funding.^[61]

[edit] Public Employees

Main article: Georgia public employee salaries

Main article: Georgia public pensions

According to 2008 Census data, the state of Georgia and local governments in the state employed a total of 604,002 people.^[62] Of those employees, 498,404 were full-time employees receiving a net pay of $1,728,268,497 per month and 105,598 were part-time employees paid $110,993,986 per month.^[62] More than 55% of those employees, or 354,531 employees, were in education or higher education.^[62]

[edit] External links

State Budget Solutions, Georgia
www.open.georgia.gov
Georgia Public Policy Foundation
Transparency in Government Initiative, official website
Secretary of State, Georgia government
News Release, Georgia Secretary of State's Office
Governor's Office of Planning and Budget
Georgia State Legislature
Model transparency legislation from the American Legislative Exchange Council is available at this link.

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[edit] Additional reading

[edit] References

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