Category: Budget Issues

Education Subcommittee Passes K-12 School Funding Recommendations

Governor Deal’s Funding Formula Subcommittee on Thursday approved a proposed revision to the way elementary and secondary schools are funded by the state. The new formula, which we told you about on Monday, would replace the more than 30 year old Quality Basic Education Act as the method used to determine the distribution of around $8.5 billion to school systems around Georgia. The Education Reform Commission is expected to release its final report to Governor Deal next month, following a final committee meeting next week.

Approval of the new formula met with the support of the Foundation for Excellence in Education, whose regional advocacy director Ryan Mahoney said in a statement,

The school funding improvements recommended today by Governor Deal’s Education Reform Commission would empower schools, educators and parents to put their money where their students’ needs are. The commission’s plan would successfully modernize a 30-year-old formula that no longer reflects the requirements of today’s classroom. This moves Georgia away from a one-size-fits-all approach to a custom fit that focuses on the advancement of each and every student. The recommendations of the commission accurately reflect the will of Georgians, who voiced majority support in our poll for changing to a more flexible, more transparent, more student-based approach.

Earlier this week, the foundation distributed the results of a survey of 500 Georgia voters taken during the last week of October. In that survey, which has a margin of error of 4.5%, nearly half, or 49% of respondents said they would probably or definitely want a change in the school funding formula to one that is more student based than the QBE formula, which is based more on the characteristics of the school system, while 37% said they preferred the current system. Support for the student based system rose to 56% when respondents were told that the current formula was 30 years old. Democrats and independents were more likely to support a change in the formula than were Republicans. 53% of Democrats and 54% of independents favored a change, while only 41% of Republicans were in favor. Read more

Loudermilk: Don’t Shut Down Government Over Planned Parenthood

As Congress prepares to debate spending bills for the remainder of fiscal 2016, some lawmakers, including House Freedom Caucus member Barry Loudermilk, are rethinking whether to insist on defunding Planned Parenthood as a condition of the bill’s passage. From a story in today’s Wall Street Journal:

A number of congressional Republicans are moving away from making Planned Parenthood funding their biggest goal in coming spending battles and instead are looking to pick more winnable policy battles such as curbing the Internal Revenue Service or environmental regulations.

Not all Republicans are willing to abandon a campaign popular among GOP voters and activists to strip federal funding from the women’s health organization. But many GOP lawmakers in both the House and Senate say they don’t want the issue to derail the spending bill needed to prevent a government shutdown when current funding expires on Dec. 11.

“We don’t win doing that,” said Rep. Barry Loudermilk (R., Ga.), who supports cutting off federal funding for Planned Parenthood. “I don’t think anybody wants to use shutting down the government as leverage for anything.”

The House previously attempted to defund Planned Parenthood, which has come under fire after a series of videos alleging the organization had profited from the selling of fetal remains, in a battle over the current continuing resolution. However, the vote was mostly symbolic since, as 7th District Rep. Rob Woodall noted, there was no Planned Parenthood funding in the spending bill. The House and Senate passed a two year budget deal last week that defines the total amount of money available to spend in Fiscal Years 2016 and 2017. December 11 is the deadline for deciding how to spend that money.

Georgia Reps Vote on Party Lines for Budget Deal

A two year budget deal that sets spending levels through FY 2017, lifts the debt ceiling, and suspends portions of the sequester but offsets the additional spending with cuts to mandatory spending passed the house late this afternoon by a vote of 266-167. 79 Republicans voted yes, while 198 voted no. All 167 Democrats voted yes. For the Georgia delegation, all Republicans voted no, while all Democrats voted yes.

Georgia’s GOP representatives were quick to respond.

First District Rep. Buddy Carter:

The national debt is the greatest threat to our national security and threatens to leave our children and grandchildren with a life indebted to China. There are good and much needed reforms in this deal that I fully support and I applaud those who worked so hard to negotiate it. That said, it falls woefully short when it comes to the kind of structural reforms necessary to prevent Washington’s spending addiction from bankrupting the American Dream.

Third District Rep. Lyn Westmoreland:

I could not vote for a budget that doesn’t address the real spending problem in Washington today. 86 percent of savings in direct spending in the Bipartisan Budget Act doesn’t occur until 2025. We are over $18 trillion in debt and there are more government programs than money to fund them. To me: it’s not ‘savings’ until its actually saved. I understand the Bipartisan Budget Act was intended to halt budget negotiations with President Obama for the next two years but it does so at the expense of my grandchildren, and that is something I just couldn’t agree to.

Seventh District Rep. Rob Woodall:

When House conservatives were successful in implementing the Budget Control Act in 2011, the goal was not simply to limit federal spending, but also to repair and restore important programs such as Medicare, Medicaid, Social Security, and veterans services. The emergence of H.R. 1314 is proof that the plan – mandatory reforms in exchange for sequester cap relief – is working. Unfortunately, H.R. 1314 lifts spending caps without introducing timely spending and programmatic reforms.

“I’m proud of the progress we’ve made in reducing federal discretionary spending over the last four years, but the truth remains we have much more work to do – and until we address our mandatory spending programs, we are ignoring the real problem. I’m eager to continue the work of crafting meaningful, long-term solutions to our fiscal problems, but I believe we can do better than this budget agreement.

11th District Rep. Barry Loudermilk:

When President Obama assumed office in 2009, our national debt hovered around $10 trillion – much less than today’s $18 trillion debt. For a president who campaigned on change, he’s sure not leaving a lot of spare change for the American people.

We must pay off the debt we owe and find a way to stop the financial bleeding. Unfortunately, the bill that passed the House today is not the way to accomplish this goal. This bill would raise the debt ceiling until March of 2017, and give the Administration a blank check to continue its reckless spending, while failing to make corresponding spending cuts.

This secretive deal making is not in the best interest of American taxpayers. Federal spending must be put through the proper budget process, not pushed through the House by a select group of power brokers with no input from the majority of members. The American people deserve a transparent process with careful deliberation and judicious review of all budgetary line items, especially as it pertains to our national defense. Passing this budget without completing the National Defense Authorization Act is like writing a blank check to Obama to run the military with no direction from Congress.

In addition, this bill does not go far enough to enact enforceable spending reductions or provide real solutions to resolving our ongoing budget crisis. This legislation would defy previously established spending caps by $50 billion for FY16 and by $30 billion for FY17. The average American citizen is now responsible for more than $57,000 of our national debt, resulting from many years of deficit spending. Rather than continuing on the current path of out-of-control spending that will pass the burden on to future generations, we must adhere to current spending caps, prioritize our nation’s most critical programs, and cut wasteful spending.

We’ll add additional statements as they arrive.

House Votes to Repeal Portions of Obamacare; Senate May Not Go Along

On a virtual party line vote Friday morning, the House approved H.R. 3762, the “Restoring Americans’ Healthcare Freedom Reconciliation Act” by a vote of 240-189. Seven Republicans opposed the measure, while a single Democrat voted in favor. The measure is the first opportunity Republicans have had to use the reconciliation process, where only 51 votes are needed to pass the Senate to eliminate portions of the Affordable Care Act, or Obamacare.

In his opening statement at the beginning of debate on the bill, Budget Committee Chairman Tom Price of Georgia described what the bill will do:

The Restoring Americans’ Healthcare Freedom Reconciliation Act repeals the individual and employer mandates, the onerous “Cadillac Tax” and medical device tax, an Obamacare slush fund, as well as undue demands on employers and employees. Additionally, it prohibits for one year taxpayer dollars from being used to pay abortion providers that are prohibited under the legislation while dedicating additional resources for community health centers across the country for women’s health care.

Taken together, the Congressional Budget Office and Joint Committee on Taxation estimate this legislation will lower deficits by $130 billion over the 10-year budget window. Roughly $51 billion of those savings would come from the positive macroeconomic effects of what we are proposing. CBO and JCT estimate that the Restoring Americans’ Healthcare Freedom Reconciliation Act would lead to an increase in the labor supply, in economic growth, in capital investment and total compensation. It would also eliminate work disincentives while decreasing federal borrowing.

7th District Congressman Rob Woodall, who also sits on the Budget Committee, said:

Since its hurried, one-sided beginning, Obamacare has forced the harsh realities of fewer choices, lower quality and higher health care costs on countless families across the country. Today’s vote addresses America’s spending problem while also closing shop on the most damaging and intrusive aspects of the President’s health care law. While there is much more to do, I’m proud of the steps the House took today, and with only 51 votes needed in the Senate to overcome filibuster, am confident we can move this important legislation to the President’s desk. It is my hope that America speaks with a loud voice urging the Senate to do just that.

America may try to speak with a loud voice, but there appears to be some that aren’t listening. Eliminating the president’s health care law has been a top priority of Republicans, and especially those in the Tea Party. Two years ago, the government was shut down, largely because of the efforts of Senator Ted Cruz. But, if you think the Senator from Texas and presidential candidate would be leading the charge on the reconciliation bill, you would be wrong. Read more

Georgia Delegation Requests Federal Funding for Savannah Port Deepening Project

The Federal government’s Fiscal Year 2016 is less than a month old, but members of Georgia’s legislative delegation are already thinking about the Peach State’s needs for FY 2017. Georgia’s representatives and senators sent a letter to Office of Management and Budget director Shawn Donovan requesting at least $100 million in federal funds to support the Savannah Harbor Expansion Project.

We appreciate the assurance that you and others in the Executive Branch have given that you consider completion of SHEP to be a national priority. Accordingly, we would like to point out that the key to the success of this project will be whether the Administration’s budget proposal next year includes at least the approximately $100 million that USACE has identified as the level that would keep the project on the path to timely and cost-effective completion.

The $100 million-per-year schedule would not represent any special treatment or accelerated funding for SHEP; rather, it would be consistent with funding provided to similar projects of high national importance in recent years. It would simply allow use of standard contracting practices that provide normal cost efficiencies in channel dredging projects. In contrast, if federal funding in FY 2017 and beyond continued at the funding level recommended by the Administration for FY 2016 -and even if that amount were supplemented to approximately $50 million through use of additional funding provided to you by the Congress- the USACE calculates that the resulting five year delay in project completion would cost taxpayers almost $1 billion. This includes $100 million in additional construction costs as well as the unrecoverable loss of the $174 million in annual economic benefits to the nation that would begin upon project completion.

The lawmakers asked that OMB consider that $100 in annual funding is not unusual for a project like SHEP, citing similar funding levels to assist with the deepening of the Port of New York. They also point out that Savannah Harbor is the fastest growing container port in the United States, with a 17% increase in volume in FY15.

Prior to 2011, federal funding for projects like SHEP would have been done via an earmark from congress. After earmarks were banned in an effort to restore public trust, all funding requests are made through the executive branch. Most of the work done to date has been with funds provided by the state of Georgia, including $214 million as the state’s share of the project, and an additional $52 million in state expenses.

Georgia Republicans Split on Continuing Resolution Vote

It may have taken the resignation of Speaker John Boehner to do it, but the chances of a government shutdown have been averted until December 11th. H.,R., 719 passed in the Senate this morning by a vote of 78-20. Both Georgia senators voted yes. For those watching the presidential race, Sens. Ted Cruz and Rand Paul voted No, while Sens. Lindsey Graham and Marco Rubio did not vote.

This afternoon in the House, the measure passed 277-151, but look at the party vote split: Only 91 Republicans voted in favor, with 151 opposing. All 186 Democrats present voted yes. Four Republicans and two Democrats did not vote.

Georgia Representatives voting yes included 2nd District Democrat Sanford Bishop, 4th District Democrat Hank Johnson, 5th District Democrat John Lewis, 8th District Republican Austin Scott, 13th District Democrat David Scott, and 7th District Republican Rob Woodall.

The No list, all Republicans: Rick Allen, 12th District; Buddy Carter, 1st District; Doug Collins, 9th District; Tom Graves, 14th District; Jody Hice, 10th District; Barry Loudermilk, 11th District; Tom Price, 6th District, and Lynn Westmoreland, 3rd District.

The unusual case of more House Democrats supporting the measure then Republicans did was partially due to the fact that the continuing resolution contained funding for Planned Parenthood.

Comments from Georgia Reps. are below the fold. Read more

Bond Rating and Future Expenditures Are Reasons to Be Cautious With Tax Reform, Says Gov. Deal

Over the weekend, Walter Jones wrote a long story for Morris News on the potential risks of moving to a sales tax and reducing or phasing out the state’s income tax. The idea has drawn a lot of support here in the state where John Linder and his successor Rob Woodall have sponsored the federal version, H.R. 25, also known as the FairTax. Georgians look to no income tax Florida to our south, and to Tennessee to our north, which only taxes interest and dividend income and wonder why the same thing can’t be done here. They point to Texas, another state without income taxes, but one that has experienced phenomenal business growth.

Georgia 2016 RevenuesThe pie chart to the right shows the various sources of income going into Georgia’s 2016 budget. This year, 45% of revenue will come from the state’s individual income tax, 4% from corporate income taxes, and 26% from sales taxes. That’s three quarters of state revenue, with no other source making up more than 6% of revenue.

Two bills were introduced during the 2015 session that would move increase sales tax revenue while reducing the top 6% income tax rate. The one receiving the most attention is Rep. John Carson’s More Take Home Pay Act, which would drop the top income tax rate to 4% while raising the state sales tax rate to 5%. The House Ways and Means Committee has begun to hold hearings on Carson’s bill, which has undergone some revisions since it was introduced.

Another bill, introduced by Reps. Brett Harrell and B.J. Pak, is a more moderate measure that would trade the loss of most tax deductions for a three quarter point drop in the income tax rate, to 5.25%. And as part of House Bill 170, which provided additional revenue and funding for transportation, a Special Joint Committee on Revenue Structure will meet this fall to see if it can come up with some sort of proposal that would have the advantage of not being vetted by the normal House and Senate committee process, and would be subject to up and down votes in the House and Senate. Read more

The Arts as a Driver of Georgia’s Economy

Next week, Lawrenceville’s Aurora Theatre will open its 20th season with a production of the musical Memphis. The theatre, which was founded by Anthony Rodriguez and Ann-Carol Pence in 1996, moved from Duluth to to a renovated 100 year old church on the Lawrenceville town square in 2007. With half a dozen major shows each year, a separate smaller series on a more intimate stage, acting classes for students and adults, and an apprentice company, the venue hosted more than 600 events and attracted more than 76,000 visitors last season.

What many don’t know, however, is that the theatre is the single largest economic force in Lawrenceville. A March, 2014 study estimated that the theatre has a 3.244 million dollar impact on Gwinnett County.

Can an investment in the arts be a driving force in economic development? The Georgia Council on the Arts and the Georgia Municipal Association think so. The two groups teamed up in June to produce a research report titled Leveraging Public Investment in the Arts. The report uses case studies from cities as varied as Blue Ridge, Athens, Clarkston and Thomasville to illustrate how the arts are being used to drive economic development.

From the mid-1980s through 2008, state funding for the arts ranged between 2 and 4.5 million annually. That number dropped considerably as a result of recession belt tightening. The 2016 budget passed by the General Assembly increased arts funding from $600,000 to $900,000. But, that’s only six cents per person, compared to 63 cents per person in South Carolina and $1.07 pe4r person in Tennessee. That puts Georgia in last place.

In an 11 Alive story, State Senator P.K. Martin, whose district includes the Aurora, says he supports additional arts funding. “As Georgians, I don’t think that we should be last,” Martin said. “I don’t think you’ll see us leading the pack either, but I think we can be competitive, especially with the states around us.”

But Governor Deal wants to make sure there is a consistent source of funding. “The revenue of our state continues to grow. That’s one of the reason we put so much focus on job creation – that’s the way you get your revenue up. When you get your revenue up, you have the ability to put more money in things like the arts.”

One way to increase arts funding is the model used in a seven county region centered on Denver, Colorado. There, the Scientific & Cultural Facilities District assesses a one tenth of one percent sales tax to fund arts programs ranging from major museums to smaller districts. That voter-approved tax provides around $40 million annually in arts funding. The city of Atlanta pushed for such a measure during the 2013 legislative session, estimating that between $11 and $12 million per year could be raised to support the arts in the city.

Disclosure: I volunteer time maintaining portions of the Aurora’s website.

Study: State Employees Paying More for Health Insurance than Peers

Georgia lawmakers requested a study in February in the amended FY 2015 budget to examine “why [State Health Benefit Plan] SHBP’s costs are higher than other comparable government employee health plans.” The study, conducted by Aon Hewitt on behalf of the Georgia Department of Community Health, is out, and you can almost see the teachers nodding in agreement. It found that Georgia teachers and other state employees are paying 29% more for their health insurance than the average employee enrolled in comparable state plans – or 17% higher when adjusted for state cost levels, demographics, and number of dependents on each plan.

The study compares the SHBP to state health plans from Florida, Kentucky, Mississippi, South Carolina, Tennessee, and the separate Board of Regents plan. When looking at average overall plan costs per employee, including employer subsidies, the SHBP ranks 2nd most expensive, with costs 11% higher than the mean. Aon Hewitt finds three main drivers of this high relative cost versus other states: that healthcare is more expensive and utilized more often in Georgia, that SHBP recipients are older and more female, and that SHBP recipients have more dependents on their plan. Once these factors are controlled for, the study finds that Georgia’s total costs per employee are actually 1% lower than in comparable states.

The study can’t, however, control away the costs that teachers and other state employees directly bear – their payroll deductions for premiums and out-of-pocket costs. SHBP enrollees face the highest unadjusted employee cost of all the comparable plans studied: 29% higher than the mean. Even employees who fully participate in the plans “wellness incentives” and don’t use tobacco face higher unadjusted costs than the average participant in all other comparable plans: 23% higher than the average of all plans. When adjusted for the location, demographic, and dependent factors mentioned above, Georgia employees have the second highest employee cost of all comparable plans and end up paying 17% higher than the mean.

The report offers ten options to lower costs. Most focus on ways to reduce total plan costs, such as implementing telemedicine options, setting up on-site health clinics for teachers, or moving to narrower networks of doctors. However, some key in on the bigger problem for the SHBP: the employee share of costs. Since Georgia passes off more costs of SHBP to its employees than comparable states, one option offered is for the state to increase its employer contribution to better match its peers. With Georgia’s tax revenues up year-over-year, you can bet that teachers groups will be pushing hard for some of these new revenues to be put towards this option.

Perdue Named to Budget Conference Committee

For the first time in many years, Congress may be able to pass a budget for fiscal year 2016. This spring, the House and Senate each passed their version of a proposed budget, and now a conference committee has been named to work out the differences. Two Georgians are represented on the committee. House Budget Chairman Tom Price of Roswell will be a House delegate, and Senator David Perdue will be one of the representatives from the Senate.

The Committee is scheduled to meet on Monday, with hopes of being able to come up with an agreement within the next two weeks. President Obama does not have to sign the budget.

In addition to Chairman Price, House Republican conference committee members include House Budget Vice Chairman Todd Rokita (IN-04), and Congressmen Mario Diaz-Balart (FL-25), Diane Black (TN-06), and John Moolenaar (MI-04). Democratic members are Ranking Democrat Chris Van Hollen (MD-08), Gwen Moore (WI-04), and John Yarmuth (KY-03). Read more

Georgia Senate to Congress: Vote for Balanced Budget amendment

The Georgia State Senate passed a resolution on Wednesday, urging Congress to draft a Constitutional amendment requiring a balanced federal budget.

SR  155 passed by a vote of 37 to 17 and was sponsored by Sen. Judson Hill (R – Marietta).

Georgia joins other states that have introduced similar legislation to encourage Congress to act on a balanced budget amendment. In 1995, a widely-supported Congressional balanced budget amendment failed by one vote. In 2014, a similar bill also sponsored by Hill passed the Georgia State Senate, but failed to receive a vote in the Georgia House of Representatives.

The resolution now moves over to the state House.

Trey Kelley Introduces a Resolution to Limit the Growth in Spending

A resolution that would limit the growth of state spending got its first hearing in the House Budget and Fiscal Affairs Oversight Committee last week. House Resolution 305, sponsored by Republican Trey Kelley of Cedartown, would use changes in the consumer price index and state population growth to cap the amount of money lawmakers could put into the following year’s budget. If revenues exceed the capped amount, they would be deposited to the state’s reserve fund, or returned to taxpayers in the form of a rebate. In order to spend more than what would be permitted under the growth formula, legislators would have to pass a standalone resolution approved by two thirds of House and Senate.

In the hearing, Rep. Kelley explained the bill as a common sense measure that tries to make sure the Georgia of the future is as great as what the state is enjoying today. Committee Chairman Chuck Martin of Alpharetta said that the bill’s limit on appropriations would be a good companion to the constitutional amendment passed by voters last year capping the income tax rate.

The proposed legislation is a version of the Taxpayer Bill of Rights that has been proposed in several state and local governments, but has only been approved at the state level in Colorado. And while the measure limits the rate of increase of the budget, it does nothing to ameliorate a decrease in the case of a recession. As a result, if state revenue should drop one year due to a difficult economic situation, the resulting lower spending level mandated by the requirement to balance the state’s budget would become the baseline for the following year’s budget increase, even if revenues were to increase to pre-recession levels.

This “ratchet down” effect is one potential drawback to the bill. According to Taifa Butler, the Deputy Director of the Georgia Budget and Policy Institute, HR 305 would place rigid restrictions on spending that would cripple investments in transportation and education. Speaking as a witness at the committee meeting, Butler said the bill tries to address a non-existing problem, noting that the Peach State is 46th in state and local revenue per person, and ranks in the bottom five in many spending categories. She also pointed out that some of the things the state provides money for, including school enrollment and Peachcare have been growing faster than the general growth in population.

Rep. Kelley said that he deliberately tried to make the bill less rigid than the TABOR used in Colorado, where a citizen referendum was originally required to allow for spending beyond what that state’s TABOR mandate. The fact that a two thirds vote by the legislature can override the spending limit makes his bill different than the one in Colorado, where the ratchet down effect eventually forced the state to develop a less restrictive model. And Rep. Martin agreed that a more precise measure than population increase and the growth in the Consumer Price Index may be necessary to prevent unforseen consequences.

No committee vote was taken on Rep. Kelley’s proposal, and he admitted that introducing the legislation was intended to start a multi-year conversation about budget priorities and spending. Even if the measure were to be passed by the legislature, voters would have to approve a constitutional amendment before the proposal could be put into effect.

John Carson Introduces the More Take Home Pay Act

House Majority Leader Larry O'Neal and Rep. John Carson listen to Speaker David Ralston expliain the More Take Home Pay Act  Photo: Jon Richards
House Majority Leader Larry O’Neal and Rep. John Carson listen to Speaker David Ralston explain
the More Take Home Pay Act. Photo: Jon Richards
A proposal for a significant change in the way the state of Georgia collects taxes was introduced by House leadership late this afternoon. Called the More Take Home Pay Act, the measure would create a single income tax rate of 4%, down from the current 6%, increase the state sales tax from 4% to 5%, and rid the tax code of a number of current exemptions.

The 87 page bill, which became House Bill 445 when it was first read in the House Momday morning, is sponsored by Rep. John Carson of Marietta. Rep. Carson explained the bill and what it would do in a late afternoon press briefing, which you can listen to below.

Rep. Carson and Speaker David Ralston emphasized that the proposal is designed to close tax loopholes, especially those that don’t lead to job creation and growth. The goal of the plan is to lower taxes for all Georgians, with Carson estimating that a family with the average income of $48,000 would save around $400 per year under the plan. Another goal is to make Georgia more competitive with surrounding states. Undeer the plan, a 4% income tax rate would be lower than all other Southern states except Florida and Tennessee, which have no income tax. A sales tax rate of 5% would be lower than all but Alabama, Louisiana and North Carolina.

In a prepared statement, Carson said,

Georgia’s tax system is long overdue for commonsense reform. The More Take Home Pay Act empowers Georgians to make more personal choices with their hard-earned income, shifting the power away from the state and toward the kitchen table. Ultimately, this bill answers the need for an updated tax system that is flatter, fairer, and puts our families first.

Speaker David Ralston added,

“Representative Carson is continuing one of the General Assembly’s most important discussions and I look forward to an open, inclusive debate on this proposal. We need a tax structure that encourages families to save and businesses to invest so that Georgia can remain competitive with our neighboring states. This bill will go through the committee process and, as always, constructive input is welcomed.

While many tax breaks and tax expenditures would be zeroed out, consumers would see new sales taxes on a number of items, including groceries, digital goods (think iTunes and other downloadable items sold online), and cable and satellite TV. Cigarette taxes would go from the current 37 cents a pack to 65 cents a pack under the plan.

The bill, introduced on Day 20 of this year’s legislative session, is not designed to pass this year. Speaker Ralston emphasized that the need is to get tax reform right, rather than do do it quickly, noting that the last round of tax reform in 2012 took three years to accomplish. Rep. Carson’s bill, along with a separate bill introduced today will be part of that discussion going forward

Leadership has requested a fiscal note, which should be available over the next week or so.

Cowsert: It’s Your Money

Editor’s Note: Senator Bill Cowsert is the Georgia Senate Majority Leader. He represents the 46th Senate District, which includes Oconee County and portions of Clarke and Walton counties. He may be reached by phone at (404) 463.1366 or via email at [email protected] Follow him on Twitter.

There is only one bill that the Georgia General Assembly has to pass each year – the budget. It is our predominant duty, more important than any law we pass under the Gold Dome and a duty more important that any partisan agenda. As your elected representatives and senators, we must remain good stewards of your money.

It is my opinion that Georgia citizens work harder and better than anyone else in the world. When the government takes a percentage of your money – no matter how small – we must ensure that Georgia and its citizens are better off for the effort.

The Georgia Constitution, unlike its federal counterpart, mandates a balanced budget. Since we cannot spend more than our tax revenues, we had to make large budget cuts when revenues fell during the great recession. As the economy recovers, our revenues are growing more than they have in many years, allowing us to restore funding in many areas of state government. We are seeing that Georgia – through budget cuts and thoughtful planning – has emerged from the recession stronger than most states. We are in an excellent position to prosper even more in the coming years.

In Georgia, we keep a “rainy day” fund to help balance our budget when the economy has an inevitable downturn. Our rainy day fund was more than $1.6 billion in 2007. These reserves helped us to weather the storm of the recession.

Our reserves dropped to almost nothing in the depths of the recession, but we have made it a priority to rebuild our rainy day fund over the past several years. Today, it is approximately $862 million, leaving Georgia in a great position to weather inevitable down cycles in the future. I am hopeful we will again have more than $1 billion in reserves by the end of this fiscal year.

This past week, the General Assembly has been in recess to allow the House and Senate Appropriation Committees to review proposed mid-year adjustments to the 2015 budget and to review the Governor’s proposed budget for the 2016 fiscal year. Mid-year adjustments for 2015 include approximately $134 million to cover school enrollment growth, $75 million towards economic development programs administered through the Department of Community Affairs, and $39 million in additional health care spending.

This year, I am proud to say, Gov. Nathan Deal has proposed a budget that focuses your money on the education of our children, on the health of our children, on public safety, and on the continuation of his economic development initiatives that will cultivate an atmosphere for economic growth so Georgia’s industries can create more and better jobs.

The proposed budget for 2016 includes expected total revenues of nearly $21.8 billion. Of this, nearly $12 billion is budgeted for education funding (pre-kindergarten through higher education), almost $5 billion for health care programs, and approximately $1.8 billion on public safety. These three areas alone make up more than 85 percent of our total budget.

For 2016, the Governor expects to add $550 million in spending for K-12 education. The funds will cover enrollment growth, an increase in the number of school days, reductions in teacher furloughs, improvement of bandwidth for schools’ internet services, and reliable education assessment programs. The Governor plans to add another $230 million toward education facilities and equipment.

In the coming weeks bills proposed, debated and passed by the General Assembly will complement the Governor’s initiatives and his proposed budget. I look forward to working for my constituents and with my constituents as we allocate our money toward the best purposes for this state.