The $20.8 billion budget Gov. Nathan Deal signed Monday is a clear indication that the state is finally digging out of its Great Recession hole.
And not a moment too soon for Deal and lawmakers, who must run for re-election after years of making deep cuts to education and health care budgets.
The budget for the upcoming fiscal year marks the biggest spending plan approved by lawmakers since 2008 and provides extra money for things such as pay raises for thousands of teachers and dozens of construction projects in metro Atlanta, including parking facilities for the new Falcons stadium downtown. It will likely wind up being the largest single year of spending in state government history.
The question is whether the upcoming year’s budget is part of a long-term upward trend or an election year giveaway to groups of politically active Georgians, such as teachers, whom Deal would like to see in a better mood.
The governor made the bill signing — typically a formality that occurs in his office — a statewide event Monday by traveling to four cities to ink the same budget. Deal faces two opponents in the May 20 Republican primary.
“The budget affects all areas of the state, and we have requests from legislators for bill signings in their area,” said Brian Robinson, the governor’s spokesman.
The budget Deal signed for fiscal 2015 — which starts July 1 — is important to millions of Georgians. It helps provide education for about 2 million students. It funds health care for 2.4 million Georgians. It pays for road improvements and prisons, economic development initiatives and cancer research, business regulation and water and sewer projects.
It increases spending by about $600 million next year, a figure that will rise during the 2015 session when lawmakers approve more money to pay for school enrollment growth. State spending will be more than $3 billion higher than it was during the heart of the recession.
State revenue collections — mostly income and sales taxes — have improved with the economy in recent years, so Deal has been able to spend more without raising tax rates.
Most of the extra money this year was plowed into k-12 education, including more than $300 million to allow school districts to add back class days that were cut during the recession, to end furloughs and to provide cost-of-living raises. The budget also includes 1 percent more for state agencies to offer their first large-scale raises in at least five years. Staffers of the lieutenant governor’s office, Senate budget office workers and some law enforcement officers will get bigger raises under the budget approved by the General Assembly.
The budget also puts millions more into scholarships for top technical college students and other higher education programs.
“We are putting our education where our economy is,” Deal said. “In order to fill the needs of a growing economy, Georgia needs more of our citizens to acquire education and skills beyond high school.”
The budget includes additional millions to deepen Savannah’s harbor and construct k-12 and college buildings across Georgia. At the last minute, Deal and lawmakers also added $17 million for a parking facility near the new Falcons stadium.
The spending plan also gives some lawmakers fighting off re-election challengers a little to crow about to home folk. House Speaker David Ralston, R-Blue Ridge, who faces a GOP primary challenge, typically hasn’t been public about local projects — known as pork — he gets in the budget. But he recently noted that the budget designates a satellite campus of the University of North Georgia for his hometown, and it sets aside hundreds of thousands of dollars to complete some ball fields in his district.
While state tax collections have been on the rise in recent years, school districts are still digging out from years of massive spending cuts and the state’s health care programs remain financially fragile because of exploding costs. Some state agencies have recovered only part of what they lost during the recession.
Still, tax collections are up 5.7 percent, or $705 million, for the first nine months of the fiscal year, well above what is needed to fund this year’s budget. That means the state will be able to sock hundreds of millions away in reserves.
“Every indication is that our income is going to continue to increase at the state level,” Deal said.
Longtime Senate Appropriations Chairman Jack Hill, R-Reidsville, who is traditionally conservative bordering on pessimistic when talking about state finances, said: “I am very encouraged by this year. When I look around I see pretty solid growth (in the economy). I see some really encouraging signs. All the signs point to a good year.”
While the state is spending more, Hill said the extra money isn’t going into new programs. “It isn’t for a lot of bells and whistles,” he said. “It is going to the basics.”
Alan Essig of the left-leaning Georgia Budget and Policy Institute said even with the growth in tax collections, any extra money is still being used to fill holes in the budgets for education, public health care and retirement programs.
“There are things not being done in state government,” Essig said. “Problems in child welfare, the food stamp backlog are just implications of the (past) cuts. There is nothing in the budget that fixes those things.”
Deal has included more money for child welfare workers.
Essig said years of special tax breaks approved by lawmakers whittled away potential revenue. Deal, for instance, signed legislation Monday making permanent a tax break for customers of luxury jet makers such as Savannah-based Gulfstream. That tax break is expected to save those customers, and cost state and local governments, $29 million to $40 million a year.
Essig says it would require several years of 7 percent to 8 percent growth in tax revenue — something the state has not seen in a long time — to make up for the cuts that have taken place since the start of the recession.
“We are several years away from making up that hole,” he said.
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Staff writer Greg Bluestein contributed to this article.