Gov. Nathan Deal traveled across Georgia on Monday promoting a new $21.8 billion state budget he signed into law that will boost spending on schools, health care and, particularly, construction.
The budget contains $1.1 billion in borrowing for new schools, bridges and college buildings.
That's on top of the road projects the state is likely to undertake now that it has a new plan expected to funnel about $1 billion a year into transportation. The transportation bill passed too late in the session to be included in the official budget for fiscal 2016, which kicks in July 1.
Still, the state’s spending plan for the upcoming year is the product of an improving state economy that has raised the government’s revenue intake.
“This allows us to to do some things we’ve put off for years,” Deal said at a stop in Dalton before heading to Albany, Macon and Statesboro. “And if you budget conservatively, you can do more with your money.”
Raises come as tough economy yields
Only a few years ago, state officials were talking about furloughs, shorter school years, program cuts and no pay raises for teachers or employees.
Next year’s budget includes 5 percent to 10 percent raises for top judges, district attorneys and circuit public defenders, provides 1 percent merit raises to rank-and-file state employees, and sends extra money to school districts to help pay for teacher pay raises in at least some systems.
State spending plays a vital role in the lives of millions of Georgians.
It helps fund the education of about 2 million students and provides 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.
During the recession, tax revenue dropped and lawmakers spent years cutting spending to match what was coming in. Most employees went without raises, and staffers and teachers were furloughed. Many state employees received tiny raises this year, their first since 2008 or 2009.
With tax collections finally above where they were before the recession, Deal and lawmakers faced a deluge of requests for higher spending. Including federal funding, the state has more than $40 billion to allocate.
The budget signing came the same day Georgia reported more encouraging news about the state’s fiscal health. Tax revenue increased $252 million, or 15 percent, in April compared with the same time last year. It was fueled by a burst in sales tax and motor fuel tax revenue over the month.
Schools, Medicaid see the most spending
The biggest chunk of the state’s fiscal plan, as in past years, goes to schools and Medicaid, the health care program for the poor and disabled.
Lawmakers included the $280 million extra that Deal recommended to allow local school districts to give raises to teachers and eliminate furloughs left over from the recession. They rejected his proposal to eliminate health insurance coverage for 22,000 part-time school employees and their dependents. The budget, however, forces local school systems to pay an extra $103 million for health coverage, eating into the extra money the governor included for raises.
House and Senate leaders backed Deal's proposal to pay the owners of select nursing homes about $27 million in extra annual payments, even though the industry's lobby said they didn't need all the money. They also agreed to pay doctors an extra $70 million in state and federal funding to help partially make up for the loss of federal payments this year.
Lawmakers went along with Deal’s proposal to substantially beef up the troubled state ethics commission, which regulates campaign finance and lobbying laws. The agency will be able to add four lawyers and four investigators next year.
HOPE scholars will see a 3 percent increase in awards next year, and private college students will receive nearly 30 percent increases in grants.
$1.1 billion in borrowing for construction
One of the most visible signs of state spending will be included in the $1.1 billion in borrowing the government will do to pay for the largest construction package since then-Gov. Sonny Perdue pumped up bond sales to create jobs during the recession.
Most of it will go to k-12 schools and college buildings. However, $100 million will go toward replacing and repairing bridges. An additional $75 million will go toward transit projects.
House and Senate leaders added $10 million to move Lanier Technical College in Hall County. Both Deal and Lt. Gov. Casey Cagle are from Hall County.
The governor vetoed one item in the budget plan: a proposal to issue a $3.5 million bond to finance a sea wall on Hutchinson Island in Savannah. Deal’s office said he struck that item because the state does not yet own that beachfront property.
The spending plan also includes money for a new library in Marietta, a new human services building in Lawrenceville and equipment for the new Georgia Film Academy, which will train students to work in the state’s booming film industry. An additional $23 million was put into the bond package to complete a parking deck near the new Falcons stadium. The Legislature included $17 million to start the project last year.
Transportation spending is separate
None of that includes all the road work that will pick up now that Deal has signed the transportation bill. Money from that plan will be formally added to the budget in the winter.
Metro Atlanta companies will be among the biggest beneficiaries. Two of the biggest road contractors in the state are in metro Atlanta: C.W. Matthews Contracting of Marietta and E.R. Snell Contractor of Snellville.
C.W. Matthews has traditionally been the Department of Transportation’s biggest contractor, and E.R. Snell is usually in the top two or three.
C.W. Matthews was paid $181 million for DOT road work in fiscal 2014, according to the state’s Open Georgia website. That was down from previous years, but the company’s work is likely to pick up now that the transportation funding bill has passed.
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