Spending shifts
State tax collections are now above what they were before the Great Recession hit. Below are some of the top areas of state spending the year before the recession started taking hold of state finances, fiscal 2008, and state funding in this year’s budget, which runs through June 30. Some of these areas also benefit from federal spending not listed here.
Education
2008: $7.79 billion
2015: $7.94 billion
Community Health (Medicaid)
2008: $2.06 billion
2015: $3.07 billion
University System
2008: $2.14 billion
2015: $1.94 billion
Prisons
2008: $1.10 billion
2015: $1.15 billion
Repayment of construction, other bonds
2008: $950 million
2015: $1.12 billion
Transportation
2008: $260 million*
2015: $864 million
Source: Governor’s budget proposals, current state budget
*Artificially low figure that year due to several reasons, including a cutback in borrowing after heavy earlier spending.
Comprehensive coverage
The Atlanta Journal-Constitution will have Georgia’s largest team covering the Legislature in January. No one will have more expertise on issues that matter to taxpayers when legislators return.
An improving economy after years of austerity cuts has state agencies, teachers and government employees hoping 2015 will be the year to finally begin making up financial ground.
Medical professionals hope for more state money to treat the poor. Business leaders want more money for transportation. State employees, 100,000 teachers and judges would like to get at least a moderate pay raise.
But at least some of them will wind up disappointed by the time the 2015 session — which begins Jan. 12 — is gaveled to a close in about three months.
That’s because most of the $800 million or so in extra revenue the state will take in this year has been all but spoken for, penciled in to pay for the rising costs of education, public health care and employee pension programs.
Just like last year. And the year before. And the year before that.
Same story, different legislative session.
Tax collections have been on the rise in recent years, but the state is only now taking in the revenue it was in 2007, before the Great Recession. Meanwhile, there are now thousands of more students in public schools, thousands more in state colleges, thousands more on Medicaid and other public programs.
“We are basically treading water with enough to keep the ship of state afloat,” said Alan Essig, a former state budget analyst and executive director of the Georgia Budget and Policy Institute.
That didn’t stop people — such as judges, educators and department heads — from asking for more money this fall as top officials began working on the upcoming year’s budget.
"I got two or three times what I'd gotten in the previous three years in terms of individual requests," said House Appropriations Chairman Terry England, R-Auburn. "We're listening to a lot of folks, but I am not making promises to anyone."
Among those contacting England and Senate Appropriations Chairman Jack Hill, R-Reidsville, were judges asking for big pay raises.
Budget requests from the state's Supreme Court and Appeals Court include $25,000 pay raises for judges in fiscal 2016, which begins July 1. Superior Court judges would get a $15,000 boost in state pay. The judges are hoping for three years of big raises, which could make them among the best-paid jurists in the country.
They have pull, particularly among lawyer-legislators. But they will have a hard time getting what they want considering that teachers and state employees have gotten puny raises or no increases at all for the past six or seven years. Some state workers earn less in a year than the $25,000 the Supreme Court justices want in a raise.
Teacher groups may be more realistic in not expecting a windfall in the upcoming year.
“While it is true that the economy is getting better and state revenues are improving, we have to remember that 2015 is not an election year and that there are priorities that may preclude putting additional funds into education,” said Tim Callahan of the Professional Association of Georgia Educators, the state’s largest teacher group.
The state budget that lawmakers will approve, probably sometime in late March or early April, touches a lot of lives.
The $21 billion the state will spend this year ($40 billion if federal and other revenue are included) helps educate about 2 million students and provide health and nursing care for more than 1.8 million Georgians. The state funds road improvements and prisons, economic development initiatives and cancer research, business and environmental regulation, parks and water projects. It creates thousands of private-sector jobs through construction projects.
State officials began cutting back in the late 2000s when the recession hit, with some agencies seeing budgets shrink 30 percent to 40 percent. While Gov. Nathan Deal tried to somewhat shield education — k-12 schools took $1 billion in austerity cuts some years, forcing local school boards to raise property taxes, furlough and lay off teachers, and shorten the school year.
Deal put an extra $300 million in the budget last year in hopes that local districts would add back school days, reduce or eliminate furloughs and, in some cases, give teachers raises. He also included money to give agencies the chance to provide small raises to state employees, something most hadn’t seen since the recession hit.
Critics saw those spending increases by Deal last year as an election-year gimmick, but it was welcome money to struggling school districts.
Deal won re-election handily in November, and he will present his budget plan the first week of the session.
Deal is expected to continue the extra school funding in fiscal 2016. He will also likely again offer agencies a little extra to fund raises, particularly to low-paid employees such as prison guards, whose salaries he has been trying to boost.
Hill and England have been public about what they see as the need to boost pay to reward and retain good employees.
“Raises are close to the top of our priority list,” England said.
The state will have to increase funding in some areas, and that will take up the bulk of what’s left of the extra tax money coming in.
That includes almost $190 million to fund increases in enrollment in Georgia’s public schools and colleges; about $150 million more for Medicaid, the health care program for the poor and disabled; $135 million more for employee retirement systems; and about $35 million for improvements in child protective services and other Department of Human Resources programs.
Not included in that list is any new spending on transportation, which is expected to be a top priority during the 2015 session. Some proposals being floated would increase taxes and bring in more money for roads and transit. But legislators are also considering using a penny of the state gasoline tax that now goes into the general budget exclusively for transportation, rather than for other state programs. If that happens, budget writers would have to find $180 million to $185 million it gets from that penny to cut elsewhere or find some other way to fill the hole.
Overall, Essig said the math is problematic for the state. Even with an improving economy, tax collections aren’t increasing like they were during some of the boom years of the 1990s.
“Every month revenues are growing. On its face, it sounds like everything is wonderful,” he said. “The context is, yes we’re growing 5 percent, but we need 4 percent of that just to stay afloat, to stay where we are.”
About the Author
