Georgia state budget (2008-2009)
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Georgia is facing a $2.2 billion budget gap for fiscal year 2009, approximately 10 percent of the general fund. However, for fiscal year 2010 the Center on Budget and Policy Priorities estimates a larger deficit of $3.1 billion, 14.5 percent of the general fund.[1] For FY 2009, revenues have declined a total of 9.5 percent.[2] Gov. Sonny Purdue's budget plan calls for budget cuts, government restructuring and new state revenue. But, Purdue said that he also wants to boost borrowing to stimulate the state's economy. "Don't hear me dismissing the scope or severity of this downturn, but more importantly don't leave failing to hear the message that we need to look beyond this downturn," said Perdue.[3] In light of increasing unemployment and declining state revenue, Purdue has issued a total of four budget cuts since the beginning of FY 2009, as of June 2009, eliminating $2.8 billion from the original budget.[2]
[edit] Impact of budget woes
- In April 2009 the state unemployment rate rose while some regions saw a decline in job losses. The April seasonally adjusted unemployment rate was 9.3 percent, according to the Department of Labor, an increase from 9.2 percent in March and February. However, in areas like the Central Savannah River area, which includes Hancock County, unemployment dropped from 9.4 percent to 8.7 percent. Hancock County is reported to be on of the poorest in Georgia.[4]
- In light of a continued decline in state tax revenue, on May 28,2009 Gov. Perdue announced that state agencies will lose 25 percent of their funding for June 2009. The governor is trimming $274 million from the budget; the 4th cut in the fiscal year.[2]
- In June 2009, the governor announced he would be cutting a million dollars from the state's Superior Courts budget; affecting more than 500 Superior Court employees, 49 district attorney and public defenders' offices. Essentially the budget cut means a two week furlough for the state's court system.[5]
- The Georgia Supreme Court formally appealed Gov. Perdue’s budget cuts, calling it unconstitutional. “We think the governor has probably exceeded his authority in doing this,” Superior Court Judge Paul Rose said. “This is something that just caught us totally by surprise because this money has already been legislatively appropriated.” According to judges, the cuts, although only effective until the FY 2010 budget begins, will cause a backup in the system and cause delays.[6]
[edit] Budget background
Georgia's fiscal year begins July 1 and ends June 30 of the following year. According to the state Constitution, every year the Governor must present a spending recommendation to the General Assembly. Additionally, the budget must be balanced. The budget recommendation, according to state law, must be submitted 5 days after the assembly convenes in January. Both the House and the Senate hold a series of hearings before approving the bill. Once the bill is approved, it is sent to the governor to be signed into law. The governor has line item veto power, however he must sign the bill within 40 days after adjournment or the bill becomes law.[7]
[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 [8] | $290.9 [8] |
| 2001 | $48.6 [8] | $299.4 [8] |
| 2002 | $53.6 [8] | $306.7 [8] |
| 2003 | $56.0 [8] | $317.9 [8] |
| 2004 | $58.4 [8] | $338.5 [8] |
| 2005 | $58.9 [8] | $359.7 [8] |
| 2006 | $63.0 [8] | $376.4 [8] |
| 2007 | $72.6 [8] | $396.5 [8] |
| 2008 | $81.2 [8] | $409.6 [8] |
| 2009 | $90.7* [8] | $408.9* [8] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about the why the crisis exists
- Georgia collected 20 percent less in taxes for April 2009 than it did a year ago in April 2008. According to state officials, April marks the 4th month that state tax revenues have been 20 percent less than estimated.[9] Ultimately the loss equals $362.1 million, bringing the state down 9.5 percent for the fiscal year.[2]
- The city of Columbus, Georgia saw continued decline in Local Option Sales Tax collections in March 2009 and February 2009. Compared to collections in 2008 tax collection was down 30.8 percent for March and 29.1 percent for February. Sales tax collections are down 7 percent for the FY 2009.[10]
[edit] Proposed actions
[edit] Governor Sonny Perdue
The governor signed FY 2010 budget into law on May 13,2009. The budget, $18.6 billion, amounts to $2.5 billion less than the original FY 2009 budget passed during the 2008 session of the Georgia General Assembly. The budget includes $23 million for trauma funding, increased fines on dangerous driving behaviors for new revenue, restructuring government departments and extension of current tax exemptions. “Cutting the budget has forced a number of difficult decisions, but we have managed the state in a thoughtful, conservative way to ensure Georgians are receiving value for their tax dollars,” said Governor Perdue. “We have maintained triple-a bond ratings, saving the state tens of millions of dollars, and funded our top priorities to ensure the basic responsibilities of state government are being met.”[11]
In late May 2009 Gov. Perdue announced his 4th budget cut for fiscal year 2009. Perdue cut an additional $274 million from the state budget, bringing the total dollar amount in cuts to $2.8 billion from the original FY 2009 budget. According to Bert Brantley, Perdue's spokesperson, the governor plans to use federal stimulus money that it had planned to spend in 2011 to soften the blow.[2]
[edit] Republicans
Georgia Republicans said that they are mostly in agreement with the governor's budget plan. “There’s no spending in it much, so it really is just a lot of pain,” said Senate Appropriations Chairman Jack Hill. “Frankly, this year, because we’re operating under such duress and all the pressure of cutting, the House and Senate worked together better than we have. There really weren’t many options anyway.”[12]
[edit] Democrats
State Democrats don't agree with the Gov. Purdue that boosting borrowing to stimulate the state's economy is the way to pull Georgia out of the budget hole. House Minority Leader DuBose Porter said, "The Governor has said he wants to borrow our way out of this crisis...to put our good credit on the line. But we cannot borrow our way out of debt."[3]
[edit] Economic Stimulus Package
Georgia is expected to receive $5.9 billion from the $787 billion dollar economic stimulus.[13] All told, the federal stimulus plan would create or save 106,000 jobs in Georgia, based on White House estimates.[14]
For more information on how the federal stimulus funds are being used in the state of Georgia, visit the state recovery website.
According to preliminary reports, Georgia is expected to receive:
- $1.7 billion infusion for Medicaid[13]
- $1.2 billion for education[13]
- $1 billion to build and repair highways and bridges[13]
[edit] Budget transparency
Georgia's official spending transparency database, mandated by the Transparency in Government Act of May 2008, was launched by January 2009. It is available here. On August 26, 2008, well in advance of that requirement, however, Karen Handel, Georgia's Secretary of State, launched the Transparency in Government Initiative. This website will be updated monthly to account for the agency's expenditures, and includes Handel's budget for 2009.
[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:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Open Georgia |  |  | | | | |
[edit] Limitations and Suggestions
Although "Open Georgia" does not yet list grants or contracts, the legislation which authorized its creation mandates that state grants and contracts be placed online by January 2010.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[15]
- It is estimated that Georgia will receive at least $4.5 billion in federal funding.[16]
- The economic recovery website for Georgia is available here.
[edit] Support for creation of the database
The National Taxpayers Union and the Council for Citizens Against Government Waste sent a letter to legislators in Georgia on April 16, 2007, urging them to support Georgia Senate Bill 300 (2008).[17] The Americans for Tax Reform also supported Georgia Senate Bill 300 (2008).[18]
[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. This site helps place the Foundation on the cutting edge of the transparency movement.
[edit] Public employee salary information
- The Georgia Department of Audits and Accounts has posted public employee salaries and travel expenses. It is broken down by organization type, then specific organization, then specific title or position.
- Open Georgia is a gateway for obtaining information about how the State of Georgia spends tax dollars, and includes payroll information.
[edit] See Also
Georgia taxpayer-funded lobbying
[edit] External links
- 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.
[edit] Additional reading
- Gov. Perdue,"Governor Perdue Signs Amended FY09 Budget," March 13,2009
- Gov. Perdue,"FY 2010 budget," retrieved June 3,2009
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," May 18, 2009
- ↑ 2.0 2.1 2.2 2.3 2.4 Associated Press,"Georgia Gov. Perdue orders more budget cuts," May 29,2009
- ↑ 3.0 3.1 WSB Radio,"Purdue Proposes Budget Cuts," January 14,2009
- ↑ Associated Press,"Unemployment rises in Ga., falls in some regions," May 28,2009
- ↑ WTOC-TV,"Governor Perdue calls for Superior Court furlough," June 3,2009
- ↑ Coastal Courier,"Budget cuts may hit courts," June 3,2009
- ↑ Georgia General Assembly,"Georgia Budget Process," retrieved June 3,2009
- ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 US Government Spending,"Georgia State and Local spending," retrieved June 3,2009
- ↑ Public Broadcasting Atlanta,"State revenue bad in April, Perdue hopes for better May and June," May 12,2009
- ↑ Ledger-Enquirer,"Columbus sales tax revenue falls 30.8 percent," May 28,2009
- ↑ Gov. Perdue,"Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget," May 13,2009
- ↑ Atlanta Journal-Constitution,"Perdue OKs budget, vetoes only 3 line items," May 14,2009
- ↑ 13.0 13.1 13.2 13.3 Associated Press,"Georgia Stimulus," February 15,2009
- ↑ American Recovery and Reinvestment Act,"Impact," retrieved June 3,2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State," April 23,2009
- ↑ National Taxpayers Union, "Taxpayers Support Creating Grant and Contract Database in Georgia," April 16, 2007.
- ↑ Americans for Tax Reform, Letter in Support of SB 300, March 17, 2008.
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