Georgia legislators were once satisfied with scraps of pork from the state budget: $20,000 for high school band uniforms, $5,000 to refurbish the local peanut statue.
Nowadays, legislative leaders serve up the whole hog, rewarding one another with multimillion-dollar projects and financing them with 20-year bonds.
But not everybody gets to eat.
In the budget Gov. Nathan Deal is expected to sign Monday, the House added $16 million in borrowing to build a technical school building in the district of the budget chairman. The House’s second-ranking Republican got $25 million, and the Senate’s budget chairman got $12.6 million for local college projects. None of the college bonds championed specifically for Democratic districts made the cut of legislative add-ons.
In all, legislative leaders added about $140 million in construction projects to the bond package Deal recommended earlier this year. If Deal signs off, taxpayers will be paying more than $200 million in extra debt service over the next 20 years.
Many of the individual projects lawmakers added will cost far more than they used to spend each year on hundreds of local-assistance grants, known in Statehouse parlance as “pork” or “special projects.”
Experts say such borrowing is increasingly attractive to lawmakers because they don’t require large upfront expenditures and are easily forgotten as the state pays off the debt over two decades. They say it’s harder to criticize borrowing for college buildings or economic development projects than the small local grants. And the projects are added behind closed doors by legislative leaders and get little public debate. They often appear one day and are voted on the next.
“Special project became a bad phrase, because everybody looked at them and said, ‘That’s pork,’” said Rep. Ben Harbin, R-Evans, former House budget chairman. “They look at bonds, and they think, ‘These are all necessary. I don’t fault anyone for putting stuff in there to help their communities.’ But there should be some openness and transparency. Part of that is lacking now.”
Veteran Sen. Vincent Fort, D-Atlanta, said, “It’s no longer about the ball uniforms or ballfield lights. The focus is more on the bonds than ever before.”
Pet local projects have been around as long as there have been politicians with tax money to spend. They were once dubbed PORC — Projects of Regional Concern. They were the fuel that helped fire lawmakers’ re-election campaigns, giving substance to their claim that they were looking out for their districts.
By the time Gov. Sonny Perdue won the governorship in 2002, spending on small-dollar local-assistance grants had topped $20 million.
Each year when legislative leaders came out with the final budget — often on the last day of the session — lawmakers would immediately flip through the document to make sure their hometown grants made the cut. If so, they were almost certain to back the budget.
Those local grants started to dry up as the state headed into recession. Harbin and others warned that the state’s finances were so bad that a pork-free diet was mandatory. Overall, state spending dropped from $21 billion to $18 billion before starting to recover.
While the Great Recession wiped out the local assistance grants, lawmakers continued to find ways to put a few local projects — money to spruce up small-town airports or extra funding for favorite schools — in the budget. And they continued to borrow.
Arturo Pérez, fiscal affairs director for the National Conference of State Legislatures, said historically low interest rates and low tax collections during the recession combined to persuade some states to borrow more.
“There has been a relatively slow recovery for states. We went from the Great Recession to the Great Uncertainty,” Pérez said. “Revenues have fallen like a bowling ball, and they haven’t bounced. Debt issuance has been a factor in how states have gone about addressing capital needs.”
He said some states tied bond packages to economic development: construction projects meant jobs. Perdue pursued this strategy during the recession, pushing more than $1 billion in borrowing in fiscal 2010 with the aim of creating 20,000 construction jobs.
Because construction projects are so expensive, they can’t be spread around like the old grants. So lawmakers used to getting a little something in the budget can feel left out.
In his first year in office, Deal dramatically cut the bond package because he wanted the state — which owes about $9 billion — to be more conservative about its borrowing.
The upcoming year’s bond projects — more than $800 million in borrowing, including the $140 million the Legislature added — is up again but still below what it was before Deal took office in 2011.
“That’s one of those areas we think we have to be cautious about,” Deal said. “The bond rating agencies do look at the long-term obligations in terms of your bonds, and last time they were very complimentary about the fact we had kept our bond package low.”
Deal proposed borrowing about $700 million in the upcoming year, and legislative leaders piled on some more.
Deal proposed several projects for metro Atlanta, including $25 million for a health building at Georgia Gwinnett College, $59 million for a biosystems building at Georgia Tech and $15 million to buy land that could be used for a new Atlanta Falcons stadium.
But some lawmakers were disturbed about what was taken out in Democratic areas. Money for a state history museum downtown was cut from the budget by the Senate. Construction projects at Atlanta Metropolitan College and Clayton State University were among the few college bonds chopped from the final plan.
“It’s my understanding that the conference committee members took care of their home districts and cut us out,” said Sen. Valencia Seay, D-Riverdale. “When you are not at the table, you don’t have the knife, you can’t carve out the portion you think you deserve.”
House Appropriations Chairman Terry England, R-Auburn, said it wasn’t all about politics.
“I want to make sure when we do something, we have done something that’s responsible,” England said. “I don’t want to just do it to do it.
“If the timing had not been right on my project, I would have waited.”
England’s project, which was added by his committee, was a $16 million building for the Winder campus of Lanier Technical College, headquartered in Gainesville. England said the local school system donated the land, and other potential savings made the project a deal.
Lanier Tech’s enrollment dropped 19 percent between the fall of 2010 and fall 2011. The Winder project was not on the Technical College System of Georgia’s construction wish list. It was the only project added to the budget that was not on the system’s priority list.
House and Senate leaders, with the support of House Speaker Pro Tem Jan Jones, R-Milton, also put in $25 million to buy property for a technical school campus in north Fulton County.
The House added a $6.5 million project at Kennesaw State, whose chief legislative patron, Rep. Earl Ehrhart, R-Power Springs, heads the budget subcommittee on higher education.
Jones said her project “will serve the largest area in population without a technical college branch.”
Ehrhart said his project will provide land for the school along with bridge and road improvements.
Of the projects the House and Senate added, Ehrhart said, “At least we’re providing educational opportunity for Georgia’s children instead of statues of peanuts and mules. I don’t think human nature lends itself to taking politics out of every situation.
“Anyone who thinks you can is living in a dream world.”
Another beneficiary of the add-ons was Senate Appropriations Chairman Jack Hill, R-Reidsville, who represents a part of South Georgia that includes Statesboro, home of Georgia Southern University and Ogeechee Technical College. Hill attended Georgia Southern.
Deal included $2.8 million in the budget for biology equipment at Georgia Southern in his budget. The Senate added $12.6 million in borrowing for a natural resources building at Ogeechee Technical College.
Senate budget writers also added $500,000 for an eminent banking scholar at Georgia Southern. State funding for eminent scholars has slowed dramatically during the recession. However, of the four new University System eminent scholars funded by the state over the past four years, three of them have been at Georgia Southern.
Hill argued that his committee tried to make sure every project requested by a senator got into the chamber’s version of the budget. However, some of those projects lacked support in the House, he said.
“There is no division between urban and rural, Atlanta and the rest of the state,” Hill said. “It doesn’t exist.
“Would it be easier if every time there is a hard vote, they voted with the governor or the leadership? That might be,” Hill added. “I am not saying there isn’t some politics in it. I will say this: We have done our best on the Senate projects to be fair to everybody.”
Alan Essig, executive director of the Georgia Budget and Policy Institute, said bonds have become “the way they reward folks” in the Legislature.
He also said that, with interest rates relatively low, it’s a good time to borrow to pay for infrastructure improvements a growing state needs.
“The question is, is the project worth it on its own basis, or is it put in because of pure power politics?” he said. “It’s hard to take the politics out of politics. It’s hard to tell if the priorities are truly getting funded.”
STATE DEBT SERVICE
The state constitution limits state debt service to no more than 10 percent of the prior year’s revenue. Below is the debt service and percentage of prior fiscal year’s receipts:
FY Debt service Percent
2008 $1.17 billion 5.9
2009 $1.30 billion 6.6
2010 $1.28 billion 7.2
2011 $1.31 billion 8.1
2012 $1.23 billion 7.0
2013* $1.3 billion 7.1
* Projected
DEBT ADDED
Approved borrowing added by the governor and the general Assembly during the past five years
FY Borrowing
2009 $1.02 billion
2010 $1.21 billion
2011 $858.12 million
2012 $632.41 million
2013 $812.86 million
Source: Office of Planning and Budget
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