Georgia state budget (2008-2009)

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State Information


Georgia faced 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 estimated a larger deficit of $3.1 billion, 14.5 percent of the general fund.[1] For FY 2009, revenues had declined a total of 9.5 percent.[2] Gov. Sonny Perdue's budget plan called for budget cuts, government restructuring and new state revenue. But, Perdue said that he also wanted 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, as of June 2009 Perdue had issued a total of four budget cuts since the beginning of FY 2009, eliminating $2.8 billion from the original budget.[2]

Impact of budget woes

See also: State budget issues, 2009-2010
  • 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 was 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 would lose 25 percent of their funding for June 2009. The governor was trimming $274 million from the budget; the fourth 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 meant a two week furlough for the state's court system.[5]
  • The Georgia Supreme Court formally appealed Gov. Perdue’s budget cuts, calling them unconstitutional. “We think the governor has probably exceeded his authority in doing this,” Superior Court Judge Paul Rose said. “This was 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, would cause a backup in the system and cause delays.[6]

Budget background

See also: Georgia state budget and finances

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 five 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]

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 had not been finalized at the time this data was compiled.

Ideas about the why the crisis occurred

  • Georgia collected 20 percent less in taxes for April 2009 than it did in April 2008. According to state officials, April marked the fourth month that state tax revenues had been 20 percent less than estimated.[9] Ultimately, the loss equaled $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 2008, tax collection was down 30.8 percent for March and 29.1 percent for February. Sales tax collections were down 7 percent for the FY 2009.[10]

Proposed actions

Governor Sonny Perdue

The governor signed FY 2010 budget into law on May 13, 2009. The budget, $18.6 billion, amounted to $2.5 billion less than the original FY 2009 budget passed during the 2008 session of the Georgia General Assembly. The budget included $23 million for trauma funding, increased fines on dangerous driving behaviors for new revenue, restructured government departments and extended then-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 fourth 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 planned to use federal stimulus money that he had planned to spend in 2011 to soften the blow.[2]

Republicans

Georgia Republicans said that they were 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 had. There really weren’t many options anyway.”[12]

Democrats

State Democrats didn't agree with Gov. Perdue that boosting borrowing to stimulate the state's economy was 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]

Economic stimulus package

Georgia was 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]

According to preliminary reports, Georgia was 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]

Budget transparency

Georgia's official spending transparency database, mandated by the Transparency in Government Act of May 2008, was launched in January 2009. On August 26, 2008, well in advance of the requirement, 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.

Legislation

  • Georgia Senate Bill 300 (2008), Transparency in Government Act

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary
Open Georgia Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
Y
600px-Yes check.png
Y
600px-Yes check.png

Limitations and suggestions

Although "Open Georgia" did not yet list grants or contracts as of 2009, the legislation which authorized its creation mandates that state grants and contracts be placed online by January 2010.

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[15]
  • It was estimated that Georgia would receive at least $4.5 billion in federal funding.[16]

Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that did not exist. According to Recovery.gov, the plan shows its funds would go to 884 Congressional Districts, though there are only 435.[17][18]

Millions of dollars in stimulus funds had been disbursed among 7 Congressional Districts in Georgia that did not exist, according to Recovery.gov.[19]

Independent transparency sites

The Georgia Public Policy Foundation 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.

Public employee salary information

See also: Georgia state government salary
  • 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.

See also

External links

Additional reading

References

  1. Center on Budget and Policy Priorities, "State budget troubles worsen," May 18, 2009
  2. 2.0 2.1 2.2 2.3 2.4 Associated Press, "Georgia Gov. Perdue orders more budget cuts," May 29,2009 (dead link)
  3. 3.0 3.1 WSB Radio, "Purdue Proposes Budget Cuts," January 14,2009
  4. Associated Press, "Unemployment rises in Ga., falls in some regions," May 28,2009 (dead link)
  5. WTOC-TV, "Governor Perdue calls for Superior Court furlough," June 3,2009
  6. Coastal Courier, "Budget cuts may hit courts," June 3,2009
  7. Georgia General Assembly, "Georgia Budget Process," accessed June 3,2009
  8. 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," accessed June 3,2009
  9. Public Broadcasting Atlanta, "State revenue bad in April, Perdue hopes for better May and June," May 12,2009
  10. Ledger-Enquirer, "Columbus sales tax revenue falls 30.8 percent," May 28,2009
  11. Gov. Perdue, "Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget," May 13,2009
  12. Atlanta Journal-Constitution, "Perdue OKs budget, vetoes only 3 line items," May 14,2009
  13. 13.0 13.1 13.2 13.3 Associated Press, "Georgia Stimulus," February 15,2009
  14. American Recovery and Reinvestment Act, "Impact," accessed June 3,2009
  15. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  16. Wall Street Journal, "Stimulus Spending by State," April 23,2009
  17. $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
  18. Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
  19. Georgia, Watchdog.org, November 17, 2009