Georgia state budget (2010-2011)

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Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) online.[1]

2011 State spending & deficit in billions[2]
Total spending Education Healthcare Protection Departments Agriculture Debt management
$17.8 $10.3 $3.3 $1.4 $.75 $.76 $1.1
2011 Local spending & deficit in billions[3]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$58 $0.3 $4.7 $18.8 $1.2 $4.3 $3.2 $51.2

Lawmakers approved a $17.9 billion budget for FY2011 which was signed into law in June 8 2010, prior to the start of the fiscal year on July 1, 2010.[4] Many cuts were made to the state budget as tax collections tumbled 9% in FY2010 as a result of the recession. Although the budget was balanced, lawmakers drafted it assuming that Congress would approve $375 million in funds.[5] Congress approved HR 1586, and Georgia received $550 million of a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[6] Before the funds were approved, Gov. Sonny Perdue made additional budget cuts, ordering state agencies to reduce spending by another 4%. He exempted K-12 schools but not the university system from the cuts. Officials had cut the state budget by more than $3 billion during the past two years.[7][8]

Gov. Deal proposed a mid-year budget on Jan. 13, 2011, which was to increase spending by $163 million. with the increase coming mostly from reserves to fund increases in school enrollment.. Deal also said he planned to cut 14,000 positions, most of which were vacant at the time of the announcement, meaning few state workers would actually be laid off.[9]

Georgia's $17.9 billion state budget for FY2011 which began on July 1, 2010, was passed on time and signed on June 9, 2010, by then-Gov. Sonny Perdue after much wrangling in the state legislature.[10] The FY2011 appropriations bill that the governor signed into law was House Bill 948, the text of which can be found as signed here (timed out). One key part of the budget was contained in HB 307, which imposed a 1.45 percent bed tax on hospitals[11] and was intended to raise $216 million, funds which were critical to balancing the state's budget.[12] State agencies cut their budgets by 4%.<rev name=revenues/>[13]

Tax revenues

The state's tax revenues increased in the first two months of the fiscal year, with August 2010 showing a double-digit gain in tax collections over the same month previous year.[14] Individual state income tax collections rose 24% over August 2009, a gain of nearly $120 million.[14] The state budget plan was based on a 4% growth in tax collections, so the budget remained mostly on track with tax collections up 3.3%.[14] Perdue spokesman Bert Brantley said that the modest growth "matches our revenue estimate for the year."[14] In August 2010, the Department of Revenue said receipts totaled were $1.185 billion compared to the $1.052 billion in August 2009.[15]

Despite two good months of sales tax revenue,the state's tax design didn't bring in enough money to pay all of the expenses of state government, leading financial experts predicted that the state would come up short $1.5 billion to $2.1 billion during each year well past fiscal year 2015.[16]

Federal Funds

The amount of state aid approved by Congress in August 2010 included for Georgia $234 million in Medicaid-related funding and $322 million in education funding.[17] The budget for the 2010-2011 school year was set in August 2010, and no further education layoffs were planned, said spokesman for the governor Bert Brantley. He also said that the 4% across-the-board budget cuts for state agencies would continue and that the federal funding would be most useful if the state can keep it until 2012, when other federal funds would run out.[17]

Additional Cuts

Three weeks into the fiscal year, Gov. Perdue ordered state agencies to cut an additional 4% because Congress had not yet approved $375 in federal funding which the budget drafters presumed would arrive. The governor ordered the cuts preemptively and estimated it would reduce state spending by $25.5 million per month.[7][18]

The governor ordered the university system to comply with the cuts, but exempted K-12 education.[7]

The cuts meant furloughs for state employees. While some of the state workers were taking days off without pay before the cuts, many more had to did so under the governor's order.[7]

Passage of the Budget Bill

On April 13, 2010, the House of Representatives budget committee passed a $17.7 billion state budget for FY2011 that would cut spending about $500 million below what Gov. Sonny Perdue recommended three months prior.[19] The budget, with cuts to state agencies across the board, added a 1.45 percent tax on Georgia hospitals’ net revenues and moved more than $300 million in federal stimulus dollars from Georgia’s k-12 education program and university system into the budget to plug a shortfall[19], but also included $10 million to help fund the relocation of the College Football Hall of Fame to Atlanta, was approved by the House.[20]

The Georgia State Senate approved a $17.8 billion budget by a 49-2 vote a $17.8 billion FY2011 budget on April 21, 2010.[21] The Senate restored nearly $900,000 to the budget to fund the Georgia Arts Council[21], the elimination of which in the House's version triggered protests.[22]

The full House and Senate approved the $17.9 billion budget on April 29, 2010, the last day of the legislative session.[23] Gov. Perdue signed the budget on [SC|June 9, 2010]. Due to declining state revenues, the FY2011 budget was more than $300 million smaller than the budget Perdue recommended to the legislature in January, a reflection of continuing recession-driven declines in state tax collections.[21]

The budget included two revenue generating proposals: (1) a 1.45 percent tax on Georgia hospitals’ net revenues and (2)increases in approximately 80 fees for assorted state services. Together, the two measures were aimed at increasing state revenues by about $275 million.[21] Another revenue generator was the provision for the sale of most of a state bond program used to help underwrite local water and sewer projects, which aimed at raising $300 million.[21][24]

The budget included $42 million for increased staffing at state mental hospitals and programs run by the Georgia Department of Behavioral Health. It also contained a bond package of $858 million, with $393 million for equipment and building projects for Georgia schools and $200 million meant for transportation projects.[24]

The governor vetoed bond funding for five projects, including $6.4 million for road improvements on the campus of [www.kennesaw.edu/ Kennesaw State University], because he said the affected state agency did not request the funding or the project should had been funded through a different department.[24]

Prior Budgets

The state had to repeatedly revise and amend its state budgets for FY 2009 and FY 2010 as their revenue projections consistently declined. Gov. Perdue signed on May 13, 2009[25] the FY 2010 budget passed by the Georgia General Assembly and then he had to order state agencies 16 days later to cut 25% for the month of June to squeak by to end FY 2009.[26] Further cuts were required due to declining revenue, and the revised state budget saved funds in part with furlough days for state employees.[27].[28]

The start of FY 2010 (July 1, 2009) did not bring relief from declining revenues and corresponding appropriation revisions as Gov. Perdue (agreed by legislative leaders to avoid a special session) on July 21, 2009 called on 128,000 teachers to take 3 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 also take 3 unpaid furlough days to cover the new $900 million deficit.[29]

The Georgia Department of Revenue released 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.[30] Georgia’s FY 2010 budget of $18.6 billion was $2.5 billion less than the original FY 2009 budget.[31] Georgia Budget and Policy Institute (GBPI) predicts the FY 2010 budget would be $1.2 billion short above and beyond the cuts made during its passage. GBPI estimates a deficit of $740 million for FY 2011, at which time the state would not had any reserve funds available and less federal stimulus money to cushion the impact.[32]

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 break down into:[32]

  • 38% Budget Cuts
  • 34% Federal Stimulus
  • 17% Reserves & Other Actions
  • 11% Elimination of Homeowner Tax Relief Grant

Budget background

See also: Georgia state budget and finances

The 2009 Georgia General Assembly Session's $3.1 billion budget adjustments for FY 2010 were:[32]

  • 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.[32]

Top two sources of revenue were individual income taxes, $8.2 billion (anemic increase of .2% in FY 2010) and Sales & Use Taxes, $5.2 billion (-4.0% in FY 2010).[32]

Total State Funds[32]

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[33]

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 their annual session.[34]

Budget Processes

The House in January 2011 approved a budget reform bill based on zero-based budgeting, which requires state agencies to justify all of the expenditures each year as opposed to the current system under which department heads need 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.[35]

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[36] $290.9[36]
2001 $48.6[36] $299.4[36]
2002 $53.6[36] $306.7[36]
2003 $56.0[36] $317.9[36]
2004 $58.4[36] $338.5[36]
2005 $58.9[36] $359.7[36]
2006 $63.0[36] $376.4[36]
2007 $72.6[36] $396.5[36]
2008 $81.2[36] $409.6[36]
2009 $90.7*[36] $408.9*[36]
  • NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

See Georgia state budget (2008-2009) for more details.

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 codified the realignment of the state's financial reporting and financial system responsibilities under a single State Accounting Officer (SAO). The State Accounting Office was responsible for the following duties:[37]

  • 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 was responsible for state financial accountability.[38]

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.[39] Georgia's (timed out) CAFRs were published online by the Georgia Department of Audits.[38]

Economic Stimulus Package

Georgia was expected to receive $5.9 billion from the $787 billion dollar economic stimulus.[40] All told, the federal stimulus plan would create or save 106,000 jobs in Georgia, based on White House estimates.[41]
For more information on how the federal stimulus funds were being used in the state of Georgia, visit the state recovery website.

According to preliminary reports, Georgia was expected to receive:

  • $1.7 billion infusion for Medicaid[40]
  • $1.2 billion for education[40]
  • $1 billion to build and repair highways and bridges[40]

Budget transparency

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 includes Handel's budget for 2009.[42]

See also: Evaluation of Georgia state website

Government tools

The following table was 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.[43]


Limitations and Suggestions

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

Economic stimulus transparency

The American Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[44] It was estimated that Georgia would receive at least $4.5 billion in federal funding.[45]

Five Georgia projects were listed in Senator Coburn and Ballotpedia:John McCain|Senator McCain's]] report “Summertime Blues : 100 Stimulus Projects That Give Taxpayers The Blues.” More than $762,000 was given to Georgia Tech to study improvised music “hopefully also create satisfying works of art.”[46] More than $677,000 was awarded to Georgia State researchers who would use the funds to study how primates respond when a situation worsens.[46] Another project granted $427,000 to Georgia Tech to study how seniors react to Nintendo Wii games.[46] The last project was granted to the Georgia Forestry Commission, the Commission received $900,000 to plant tree in urban areas.[46]

  • Georgia established an economic recovery website.[47]

Independent transparency sites

The Georgia Public Policy Foundation had 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.[48]

Public employee salary information

  • The Georgia Department of Audits and Accounts had posted public employee salaries and travel expenses. It was broken down by organization type, then specific organization, then specific title or position.[49]
  • Open Georgia was a gateway for obtaining information about how the State of Georgia spends tax dollars, and includes payroll information.[50]

See also

Georgia government sector lobbying Georgia public pensions Georgia state budget and finances

External links

Additional reading


References

  1. FY2012 CAFR (dead link)
  2. "Governor's Office of Planning and Budget" The Governor's Budget Report
  3. USA Spending, State Guesstimated* Government Spending
  4. Atlanta Business Chronicle "Perdue signs ’11 budget" June 8, 2010
  5. Bloomberg Businessweek "Ga. posts increase in cash amid bruising recession" June 12, 2010
  6. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  7. 7.0 7.1 7.2 7.3 The Atlanta Journal Constitution "Perdue orders new state spending cuts" July 23, 2010
  8. Transparency in Government Initiative
  9. The Atlanta Journal Constitution "Deal warns of cuts, promises progress in first State of the State" Jan. 12, 2011
  10. GovMonitor "Georgia Governor Perdue Signs $17.9 Billion FY 2011 Budget" June 9, 2010
  11. Text of HB307 April 3, 2010
  12. Atlanta Journal Constitution April 3, 2010
  13. House Bill 307
  14. 14.0 14.1 14.2 14.3 The Atlanta Journal Constitution "State's revenues up again" September 9, 2010
  15. Watchdog, Georgia Reports Slightly Encouraging Monthly Revenue Numbers, Sept. 9, 2010
  16. The Florida Times-Union "Georgia budget deficit likely to continue more than five years" Aug. 22, 2010
  17. 17.0 17.1 Atlanta Journal Constitution "Georgia could get more than $550M from jobs bill" Aug. 11, 2010
  18. Watchdog, Georgia’s New Budget Lasts Three Weeks Before Agencies were Told to Cut, July 26, 2010
  19. 19.0 19.1 Atlanta Business Chronicle "House panel OKs slimmer ’11 budget" April 13, 2010
  20. Atlanta Journal Constitution "Budget takes center stage" April 18, 2010
  21. 21.0 21.1 21.2 21.3 21.4 Atlanta Business Chronicle "Ga. Senate approves tight 2011 budget" April 21, 2010
  22. Athens Banner-Herald "Artists protest at Gold Dome" April 20, 2010
  23. Atlanta Journal Constitution "Lawmakers pass $17.9 billion budget" April 29, 2010
  24. 24.0 24.1 24.2 Atlanta Business Chronicle "Perdue signs ’11 budget" June 8, 2010
  25. Gov. Perdue Press Release, “Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget,” May 13, 2009
  26. The Atlanta Journal-Constitution, "State agencies to cut 25% in June," May 29, 2009
  27. Atlanta Journal Constitution "House passes trimmed-down 2010 budget" February 11, 2010
  28. HB 947 (timed out)
  29. Savannah Morning News, "Gov. Perdue calls for furloughs, more budget cuts," July 21, 2009
  30. Georgia Department of Revenue, “Comparative Net Revenue Collections," October 8, 2009
  31. Gov. Perdue Press Release, “Governor Perdue Signs $18.6 Billion Fiscal Year 2010 Budget,” May 13, 2009
  32. 32.0 32.1 32.2 32.3 32.4 32.5 Georgia Budget & Policy Institute, “Solving Georgia’s Fiscal Crisis Requires More Thoughtful Measures Than Cutting Public Structures,” September 2009 (dead link)
  33. 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)
  34. National Association of Budget Officers, "Budget Processes in the States," 2008 (dead link)
  35. Businessweek "Ga. Senate, House tackle zero-based budgeting" Jan. 28, 2011
  36. 36.00 36.01 36.02 36.03 36.04 36.05 36.06 36.07 36.08 36.09 36.10 36.11 36.12 36.13 36.14 36.15 36.16 36.17 36.18 36.19 US Government Spending, "Georgia State and Local spending," accessed June 3,2009
  37. Georgia State Accounting Office Web site, accessed October 15, 2009
  38. 38.0 38.1 The Georgia Department of Audits Web site, accessed October 15, 2009
  39. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  40. 40.0 40.1 40.2 40.3 Associated Press, "Georgia Stimulus," February 15,2009
  41. American Recovery and Reinvestment Act, "Impact," accessed June 3,2009
  42. Transparency in Government Initiative
  43. [1]
  44. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  45. Wall Street Journal, "Stimulus Spending by State," April 23,2009
  46. 46.0 46.1 46.2 46.3 Watchdog, Summertime Blues: Grandpa Grabs the Video Game Player in Georgia, Aug 5, 2010
  47. Georgia Economic Recovery Site
  48. Georgia Report Card for Parents,
  49. public employee salaries and travel expenses
  50. Open Georgia