Georgia state budget (2009-2010)

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The state repeatedly had to revise and amend its state budgets for FY 2009 and FY 2010 as revenue projections consistently declined. Gov. Perdue signed on May 13, 2009 the FY 2010 budget passed by the Georgia General Assembly and then had to order state agencies 16 days later to cut 25% for the month of June to squeak by to end FY 2009.[1][2] Further cuts were required due to declining revenue, and the revised state budget saved funds in part with furlough days for state employees.[3]

The start of FY 2010 (July 1, 2009) did not bring relief from declining revenues and corresponding appropriation revisions as Gov. Perdue on July 21, 2009 called on 128,000 teachers to take three unpaid furlough days while ordering 3% cuts in Medicaid and education budgets. Most other state agencies were ordered to take 5% cuts and their state personnel to take three unpaid furlough days to cover the new $900 million deficit.[4]

The Georgia Department of Revenue released on October 8, 2009 figures showing September 2009 state revenues were down 16% ($585 million) from September 2008, and FY 2010 year-to-date collections were down 14.2% ($1.37 billion) compared to FY 2009.[5] Georgia’s FY 2010 budget of $18.6 billion was $2.5 billion less than the original FY 2009 budget.[6] Georgia Budget and Policy Institute (GBPI) predicted the FY 2010 budget would be $1.2 billion short above and beyond the cuts made during its passage. GBPI estimated a deficit of $740 million for FY 2011, at which time the state would not have any reserve funds available and less federal stimulus money to cushion the impact.[7]

A total of $4 billion in measures had been taken to close Georgia's 2010 budget gap, $3.1 billion by the General Assembly during passage and $900 million by Gov. Perdue in July 2009. Actions on the FY 2010 budget are as follows:[7]

  • 38% - budget cuts
  • 34% - federal stimulus
  • 17% - reserves and other actions
  • 11% - elimination of Homeowner Tax Relief Grant

Budget background

See also: Georgia state budget

The 2009 Georgia General Assembly Session's $3.1 billion budget adjustments for FY 2010 were:[7]

  • Cutting $800 million from state agencies
  • Eliminating the Homeowners Tax Relief Grant, raising $428 million
  • Using $1.4 billion from the federal State Fiscal Stabilization Fund and an increased federal Medicaid match (ARRA funds)
  • Using $500 million in various reserve funds

During FY 2009, revenues declined 10.5 percent from FY 2008 levels. This resulted in a FY 2009 budget shortfall of approximately $650 million. Lawmakers closed the shortfall by using approximately $365 million of the remaining Revenue Shortfall Reserve funds, approximately $190 million in ARRA funds, and end-of-year budget savings.[7]

The top two sources of revenue were individual income taxes, $8.2 billion (anemic increase of .2% in FY 2010) and sales and use Taxes, $5.2 billion (-4.0% in FY 2010).[7]

Total state funds[7]

FY 2009 amended revenue FY 2010 estimated revenue Percentage change
$18,629,356,585 $18,569,866,489 -0.3%

FY 2010 total state funds budget (includes lottery funds and tobacco funds) funding area[8]

Education 58.1%
Health and social services 10.0%
Criminal justice 9.1%
Medicaid and PeachCare 8.9%
Debt service 6.1%
Transportation 3.8%
All other government 4.0%

Georgia's fiscal year runs from July 1 to June 30. The governor submits the budget to the legislature in January for its annual session.[9]

Budget processes

The House in January 2011 approved a budget reform bill based on zero-based budgeting, which requires state agencies to justify all expenditures each year, as opposed to the then-current system under which department heads were only required to explain their requests for budget increases. The legislature approved zero-based budgeting before, but the measure died repeatedly on then-Gov. Sonny Perdue's desk.[10]

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[11] $290.9[11]
2001 $48.6[11] $299.4[11]
2002 $53.6[11] $306.7[11]
2003 $56.0[11] $317.9[11]
2004 $58.4[11] $338.5[11]
2005 $58.9[11] $359.7[11]
2006 $63.0[11] $376.4[11]
2007 $72.6[11] $396.5[11]
2008 $81.2[11] $409.6[11]
2009 $90.7*[11] $408.9*[11]
  • NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.

Accounting principles

See also: Georgia government accounting principles

The Georgia State Accounting Office was established on October 6, 2004 with an executive order signed by Governor Sonny Perdue. Governor Perdue signed House Bill 293, which codifies the realignment of the state's financial reporting and financial system responsibilities under a single State Accounting Officer (SAO). Greg Griffin was appointed Georgia's State Accounting Officer in August 2008. The State Accounting Office is responsible for the following duties:[12]

  • Establish statewide accounting and reporting standards and practices.
  • Operate and improve statewide financial and human capital management systems.
  • Prepare the state's Comprehensive Annual Financial Report (CAFR), the annual audited financial statement for the entire state entity.
  • Provide statewide financial information on interim basis.
  • Train state accounting and payroll personnel in new polices, procedures and standards.
  • Improve accountability, efficiencies and internal controls.

The Georgia Department of Audits is responsible for state financial accountability.[13]

The Institute for Truth in Accounting (IFTA) rated Georgia “tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Georgia’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[14] Georgia's CAFRs are published online by the Georgia Department of Audits.[13]

Economic stimulus package

Georgia was expected to receive $5.9 billion from the $787 billion dollar economic stimulus.[15] All told, the federal stimulus plan would create or save 106,000 jobs in Georgia, based on White House estimates.[16]

According to preliminary reports, Georgia was expected to receive:

  • $1.7 billion infusion for Medicaid[15]
  • $1.2 billion for education[15]
  • $1 billion to build and repair highways and bridges[15]

Budget transparency

See also: Evaluation of Georgia state website

Georgia's official spending transparency database, mandated by the Transparency in Government Act of May 2008, was launched by January 2009. On August 26, 2008, well in advance of that requirement, however, Karen Handel, Georgia's Secretary of State, launched the Transparency in Government Initiative. This website would be updated monthly to account for the agency's expenditures, and included Handel's budget for 2009.

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 P
Partial.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
{{{1}}}
  • The website had two search functions, one for "Salaries and Travel Reimbursements," the other for "Other Expenditure Information," but was not searchable outside these prescribed categories.
  • Grant information was not available.
  • Contract information was not available.
  • Line item expenditures and department budgets were not available.
  • The site had a search for public employee salaries.[17]

Economic stimulus transparency

The American 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.[18] It was estimated that Georgia would receive at least $4.5 billion in federal funding.[19]

Five Georgia projects were listed in Senator Coburn's and Ballotpedia:John McCain|Senator McCain's]] report “Summertime Blues: 100 Stimulus Projects that Give Taxpayers the Blues.” More than $762,000 went to Georgia Tech to study improvised music and “hopefully also create satisfying works of art.”[20] More than $677,000 went to Georgia State researchers who would use the funds to study how primates respond when a situation worsens.[20] Another project granted $427,000 to Georgia Tech to study how seniors react to Nintendo Wii games.[20] The last project was granted to the Georgia Forestry Commission. The Commission received $900,000 to plant tree in urban areas.[20]

Public employee salary information

See also: Georgia state government salary

See also

External links

Additional reading


References

  1. Gov. Perdue Press Release, “Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget,” May 13, 2009
  2. The Atlanta Journal-Constitution, "State agencies to cut 25% in June," May 29, 2009
  3. Atlanta Journal Constitution "House passes trimmed-down 2010 budget" February 11, 2010
  4. Savannah Morning News, "Gov. Perdue calls for furloughs, more budget cuts," July 21, 2009
  5. Georgia Deptartment of Revenue, “Comparative Net Revenue Collections," October 8, 2009
  6. Gov. Perdue Press Release, “Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget,” May 13, 2009
  7. 7.0 7.1 7.2 7.3 7.4 7.5 Georgia Budget & Policy Institute, “Solving Georgia’s Fiscal Crisis Requires More Thoughtful Measures Than Cutting Public Structures,” September 2009 (dead link)
  8. Georgia Budget & Policy Institute, “Analysis of the FY 2010 Budget: Closing One Year’s Shortfall and Planning for Another,” June 2009 (Updated 7/13/2009) (dead link)
  9. National Association of Budget Officers, "Budget Processes in the States," 2008 (dead link)
  10. Businessweek "Ga. Senate, House tackle zero-based budgeting" Jan. 28, 2011
  11. 11.00 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 US Government Spending, "Georgia State and Local spending," accessed June 3,2009
  12. Georgia State Accounting Office Web site, accessed October 15, 2009
  13. 13.0 13.1 The Georgia Department of Audits Web site, accessed October 15, 2009
  14. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  15. 15.0 15.1 15.2 15.3 Associated Press, "Georgia Stimulus," February 15,2009
  16. American Recovery and Reinvestment Act, "Impact," accessed June 3,2009
  17. [1]
  18. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  19. Wall Street Journal, "Stimulus Spending by State," April 23,2009
  20. 20.0 20.1 20.2 20.3 Watchdog, Summertime Blues: Grandpa Grabs the Video Game Player in Georgia, Aug 5, 2010