Georgia state budget

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Georgia state budget

Flag of Georgia.png
Budget calendar:  Annual
Current fiscal year:  2015
State credit rating:  AAA (as of May 2012)
Current governor:  Nathan Deal
Financial figures
GF expenses[1]:  $18.3 billion
All funds expenses:  $41.1 billion (estimated for FY 2013)
Spending % change:  Decrease.svg0.13%[2]
% from federal funding:  38.06%
State debt:  $115,193,862,000
Per capita state debt:  $11,612
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Between fiscal year 2009 and fiscal year 2013, Georgia's total expenditures increased by approximately $400 million, from $40.7 billion in 2009 to $41.1 billion in 2013. This represents a 0.8 percent increase, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

This page contains information about budget processes and policy issues in Georgia, including:

  • a summary of the budget drafting process
  • trends in expenditures and revenues
  • current and past fiscal year budget developments
  • financial transparency measures

Budget process

The state operates on an annual budget cycle.[5] The sequence of key events in the budget process is as follows:[6]

  1. In July of the year preceding the start of the new fiscal year, the governor sends budget instructions to state agencies.
  2. In September agencies submit their budget requests to the governor.
  3. Budget hearings are held with state agencies in November and December.
  4. Public hearings are held in late January.
  5. In January the governor submits his or her proposed budget to the state legislature.
  6. The legislature adopts a budget in March or April, effective for the fiscal year beginning in July. A simple majority is required to pass a budget.

The governor is constitutionally required to submit a balanced budget to the legislature. In turn, the legislature must pass a balanced budget, and any budget signed into law by the governor must be balanced.[6]

Georgia is one of 44 states in which the governor has line item veto authority.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures**
Georgia $18,303 $11,752 $10,211 $808 $41,074 $4,110.62
Alabama $6,897 $9,541 $7,490 $189 $24,117 $4,989.32
Florida $24,717 $24,737 $18,437 $2,084 $69,975 $3,578.76
South Carolina $6,350 $7,792 $8,158 $0 $22,300 $4,670.31
Tennessee $12,622 $13,055 $5,394 $382 $31,453 $4,841.92
**Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Georgia can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Georgia 24.0% 18.7% 0.1% 21.5% 3.7% 5.2% 26.8%
Alabama 20.9% 20.1% 0.2% 23.3% 2.5% 6.1% 27.0%
Florida 18.8% 7.1% 0.3% 30.6% 4.2% 11.0% 28.1%
South Carolina 15.9% 21.0% 0.4% 21.7% 2.7% 6.6% 31.7%
Tennessee 17.7% 12.8% 0.4% 30.7% 2.7% 6.4% 29.3%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

Between 2008 and 2012, state expenditures for higher education rose significantly. During the same time, expenditures for elementary and secondary education fell by 3.7 percentage points, a 13.4 percent decrease in the share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 24.0% 18.7% 0.1% 21.5% 3.7% 5.2% 26.8%
2011 25.2% 17.1% 1.2% 20.5% 3.0% 4.7% 28.2%
2010 24.6% 17.1% 1.4% 19.5% 3.0% 6.2% 28.3%
2009 24.2% 14.9% 1.3% 19.5% 3.0% 6.5% 30.7%
2008 27.7% 7.9% 1.5% 19.6% 3.3% 5.9% 34.2%
Change in % -3.7% 10.8% -1.4% 1.9% 0.4% -0.7% -7.4%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Georgia $5,226 $8,486 $706 $0 $3,562 $17,980 $1,799.41
Alabama $1,945 $3,104 $376 $2 $1,887 $7,314 $1,513.12
Florida $18,302 $0 $2,233 $242 $4,244 $25,021 $1,279.66
South Carolina $6,643 $126 $1,083 $0 $3,551 $11,403 $1,755.39
Tennessee $2,448 $2,796 $265 $0 $742 $6,251 $1,309.15
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Georgia ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $5,226 $8,486 $706 $0 $3,562 $17,980 $1,799.41
2012 $5,304 $8,142 $591 $0 $3,233 $17,270 $1,741.69
2011 $5,081 $7,659 $670 $0 $3,149 $16,559 $1,687.94
2010 $4,865 $7,016 $685 $0 $2,650 $15,216 $1,566.52
2009 $5,307 $7,815 $695 $0 $2,951 $16,767 $1,705.83
Change in % -1.5% 7.9% 1.6% N/A 17.2% 6.7% 5.2%
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

Fiscal year 2015

DocumentIcon.jpg See budget bill: HB 744

Governor Nathan Deal announced his fiscal year 2015 budget proposal on January 15, 2014. Under the governor's proposal, total spending for fiscal year 2015 would have equaled approximately $42.3 billion, including $20.8 billion in state spending (the remainder coming from federal funds). The budget included an addition $547 million for K-12 education over fiscal year 2014 expenditures.[14]

On April 28, 2014, Deal signed into law the fiscal year 2015 budget. The enacted budget assumed new revenues of $602.5 million (or 3 percent over fiscal year 2014). Of that, 80 percent was dedicated to K-12 education.[14]

Fiscal year 2014

DocumentIcon.jpg See budget bill: HB 106

Georgia state budget -- 2014
Georgia State Legislature
Text:HB 106
Legislative history
Introduced:January 17, 2013
House:March 12, 2013
Vote (lower house):159-15
Senate:March 22, 2013
Vote (upper house):51-0
Conference:March 28, 2013
Conference vote (upper house):54-0
Conference vote (lower house):175-1
Governor:Nathan Deal
Signed:May 7, 2013

The fiscal year 2014 budget was signed into law by Governor Nathan Deal on May 7, 2013.[15] The budget cut $1 billion from the Quality Basic Education (QBE) program, which is the source of most state money for local districts. The budget did protect other educational funds, such as school nutrition and technology centers as well as professional development and classroom technology swap programs.[16]

Fiscal year 2013

See also: Georgia state budget (2012-2013)

Fiscal year 2012

See also: Georgia state budget (2011-2012)

Fiscal year 2011

See also: Georgia state budget (2010-2011)

Fiscal year 2010

See also: Georgia state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Georgia ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $17,240 41.9% $10,786 26.2% $12,469 30.3% $632 1.5% $41,127
2010-2011 $16,476 40.4% $10,218 25% $13,273 32.5% $858 2.1% $40,825
2009-2010 $14,561 35.7% $10,381 25.5% $14,641 35.9% $1,165 2.9% $40,748
Averages: $16,092.33 39% $10,461.67 26% $13,461 33% $885 2% $40,900
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Georgia had a state debt of over $11 billion. Its state debt per capita was $11,612. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[17][18]

Total state debt in Georgia[19]
Type Totals U.S. rank
Total state debt $115,193,862,000 11
Per capita debt $11,612 39
State and other fund expenditures $18,198,000,000 5

Public pensions

See also: Georgia public pensions and Georgia public employee salaries

A 2012 report from the Pew Center on the States noted that Georgia's pension system was funded at 85 percent at the close of fiscal year 2010, above the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as a "solid performer."[20]

The funding ratio for the state's pension system decreased from 94.53 percent in fiscal year 2007 to 82.43 percent in fiscal year 2011, a drop of 12.1 percentage points, or 12.8 percent. Likewise, unfunded liabilities increased from just under $4 billion in fiscal year 2007 to more than $14.8 billion in fiscal year 2011.

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[21]

The table below lists the Standard and Poor's credit rating for Georgia from 2001 to 2012 (grades from surrounding states are provided for additional context).[21]

S&P credit ratings from 2001 to 2012
Georgia Alabama Florida South Carolina Tennessee
2012 AAA AA AAA AA+ AA+
2011 AAA AA AAA AA+ AA+
2010 AAA AA AAA AA+ AA+
2009 AAA AA AAA AA+ AA+
2008 AAA AA AAA AA+ AA+
2007 AAA AA AAA AA+ AA+
2006 AAA AA AAA AA+ AA+
2005 AAA AA AAA AA+ AA
2004 AAA AA AA+ AAA AA
2003 AAA AA AA+ AAA AA
2002 AAA AA AA+ AAA AA
2001 AAA AA AA+ AAA AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[22]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[22]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid (in millions) National rank
Georgia 38.06% $13,795 7
Alabama 36.50% $8,113 11
Florida 32.08% $22,851 30
South Carolina 32.45% $6,893 29
Tennessee 41.02% $11,199 3

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Georgia received $6.1 billion in federal stimulus funding between February 2009 and June 2013.[23]

Budget transparency

Transparency evaluation
Open Georgia
Searchability P
Partial.png
Grants N
600px-Red x.png
Contracts N
600px-Red x.png
Line item expenditures N
600px-Red x.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries Y
600px-Yes check.png
Last evaluated in 2012.
See also: Evaluation of Georgia state website and Constitutional provisions regarding reading of bills

Georgia's constitution and laws do not provide for a given period of time to review bills so that lawmakers and citizens can review them prior to lawmakers voting upon them.

The state's official spending transparency database, mandated by the Transparency in Government Act of May 2008, was launched in January 2009. It is available here.

House Bill 22 (2010) requires governments with annual budgets of more than $1 million to send an electronic copy of their spending plan to the University of Georgia, which posts them online.[24] The Atlanta Journal-Constitution reported that only 33 percent of cities, 57 percent of counties and 83 percent of school districts had submitted their budgets by the end of July 2012. Typically local budgets are approved June 30.[25]

Government tools

The table to the right is helpful in evaluating the level of transparency provided by Open Georgia.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Georgia, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[26][27]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Georgia tied for eighth in the nation with 11 other states, earning six out of eight possible points.[27]

Georgia - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget
{{{1}}}
Multi-year forecasting
{{{1}}}
Annual cycle
{{{1}}}
Binding revenue forecast
{{{1}}}
Legislative revenue forecast N
600px-Red x.png
Nonpartisan staff N
600px-Red x.png
Constitution or statutory tax/spend limitations
{{{1}}}
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, Georgia received a grade of C and a numerical score of 74, indicating that Georgia was "middling" in terms of transparency regarding state spending.[28]

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.[29] 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). Gregg Griffin was appointed Georgia's State Accounting Officer in August 2008.[30] The SAO's duties include:

  • Establishing statewide accounting and reporting standards and practices.
  • Operating and improving statewide financial and human capital management systems.
  • Preparing the state's Comprehensive Annual Financial Report (CAFR), the annual audited financial statement for the entire state entity.
  • Providing statewide financial information on interim basis.
  • Training state accounting and payroll personnel in new polices, procedures and standards.
  • Improving accountability, efficiencies and internal controls.

The Georgia Department of Audits is responsible for the state financial accountability.[31] The State Auditor is Greg Griffin.

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.[32] 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.[33] Georgia's (timed out) CAFRs are published online by the Georgia Department of Audits.[34]

Contact information

Governor's Office of Planning and Budget
270 Washington Street, S.W., 8th Floor
Atlanta, GA 30334
Phone: (404) 656-3820
Fax: (404) 656-3828

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 14.0 14.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  15. Georgia General Assembly, "2013-2014 Regular Session - HB 106," accessed April 16, 2014
  16. Empowered Georgia Action, "Georgia Education Legislation Summation for the 2013 Session," accessed April 16, 2014
  17. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  19. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  20. Pew Center on the States, "Widening Gap Update: Georgia," June 18, 2012
  21. 21.0 21.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  22. 22.0 22.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  23. Recovery, "Stimulus Spending by State"
  24. Georgia Legislative Summary (2010), Accessed July 24, 2012
  25. CBS Atlanta, Ga. governments fail to post electronic budgets, July 23, 2012
  26. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  27. 27.0 27.1 27.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  29. The Georgia State Accounting Office
  30. Georgia State Accounting Office Web site, accessed October 15, 2009
  31. The Georgia Department of Audits
  32. The Institute for Truth in Accounting
  33. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  34. The Georgia Department of Audits Web site, accessed October 15, 2009