Week 2 of 2012 Session
This summer, the Republican Caucus traveled across the state holding a series of town hall-style meetings called Solution Summits. The goal of these meetings was to determine what issues Georgians are most concerned about. As a result of your input at these meetings, the Senate Majority Caucus announced the following goals as our primary legislative objectives for the 2012 Legislative Session:
- Promoting Limited, Constitutional Government
- Increasing Fiscal Responsibility
- Creating Pro-Jobs Tax Reform
- Instituting 21st Century Education Reform
- Protecting Our Children
Georgians are expecting us to put the state back on the right track starting with sweeping reform and responsible spending. We can’t afford to look our children in the eye and tell them that next year education will be better, wasteful spending will be stopped, and more jobs will be created unless significant changes take place. While others may be satisfied to sit on the sidelines, more interested in drawing party lines than investing in lasting change, I stand eager to serve and ready to take on the task. The time to act is now.
Promoting limited government was one of the primary objectives expressed by citizens across Georgia. As leaders in Washington continue to guide us down the path of wasteful spending and irresponsible policy, we must take control of the future of our state to ensure a bright tomorrow for our children. I will continue to champion meaningful tax reform in Georgia as one of the many ways we can bring jobs to our state. As we work to create safer communities and enhance our public education system, we should do so while allowing you, not the government, to decide how to spend your hard earned money.
Georgia’s legislators have established a fiscally responsible tone when dealing with valuable taxpayer dollars. As our revenues have begun to rebound, we’ve turned our attention to shoring up our Revenue Shortfall Reserve (RSR). Just as every family in Georgia strives to have a financial cushion, we as a state must be forward thinking and prepare for future emergencies and economic downturns. During the past two years, we have rebuilt the RSR from $160 million last year to $328 million today. This is roughly the equivalent of 7 days of state operations. Because of these conservative, well thought out principles, Georgia remains one of only eight states with a AAA bond rating by all three rating agencies. Meeting our revenue estimates has proved to be a challenge in recent years and it is vital that we continue to shore up the RSR in order to protect our state from the sting of hard times.
Over the past few days, members of the Georgia General Assembly have listened to brief overviews from various state agencies. This testimony supplements our line-by-line review of the proposed budget. These hearings allow for public scrutiny of the state’s spending and help us to take a conservative approach to spending by eliminating waste. They also allow the consideration of limited spending increases that may spur job creation and economic growth.
The FY2013 General Budget recommendation presented by the Governor called for a spending plan of approximately $19.2 billion. Governor Deal’s budget does not include any tax increases and is built on $929 million in revenue growth from existing sources. Tax revenue is projected to grow 5% over the FY2012 Amended Budget. While this might seem like a lot, it is less than 2007 when revenue approached its peak at $19.9 billion.
The majority of the increased revenue went to cover growth due to population increases and closing projected deficits. K-12 enrollment growth of 0.36% required $59 million and teacher step increases for training and education required $56 million. Enrollment growth of 3.05% in the University System and 6.6% in Technical Schools resulted in a combined addition of $93 million recommended for these agencies. $154 million was added to the budget to meet our retirement obligations. This increase was required primarily due to stock market losses as well as the increased number of state employees and teachers retiring. Not only does this “annual required contribution” keep the retirement plans fiscally sound, but it is also an important factor for bond raters as they assess the state’s AAA bond rating. Deficits and enrollment growth in Medicaid and deficits in the State Health Benefit Plan claimed approximately $300 million of the increased growth revenue. Other deficits in the budget claimed an additional $100 million.
It is important to remember that while revenues have dropped since 2008, the state has seen an increase in the demand for services. The university system has seen 17% growth and technical schools have seen an increase of 46% from 2008 to 2011. The number of Medicaid and PeachCare recipients grew 17% during this time as well.
In addition to covering these shortfalls, Governor Deal also announced a new set of initiatives. Accountability Courts, a post-conviction program that allows the avoidance of prison in exchange for monitored treatment and recovery, have been expanded by $10 million. Anticipating needs in the health care field, the Governor recommended $9.2 million to cancer-related research and training of health care professionals. Pre-K saw the restoration of 10 days to the school calendar, days that were cut last year due to declining lottery revenue. Other increases include a reading mentoring program, additional funding for school nurses, a Medicaid provider cut restoration, and increased capacity at the Department of Juvenile Justice.
The Senate budget team is working toward identifying wasteful government spending while protecting vital areas such as education, health care, and public safety. It is a long process and we must allow all ideas and strategies to be laid on the table and fully discussed. Our state’s future is too important to rush through this budget and not identify the common sense, fiscally responsible solutions that will keep Georgia moving toward a prosperous and bright future.
Our top priority this session is enacting policy focused on job creation and economic growth, but without a doubt the 2011 budget is the biggest challenge we have. In order for us to make the targeted cuts we need, it is paramount that we take time to go over every area of each agency to analyze where and how these cuts can be made.
Legislators will return to their chambers Monday, January 23rd for the sixth day of the 2012 Legislative Session. Please remember to contact me in my office with the issues that are affecting you and your area. I am here to represent you and it is an honor for me to work on your behalf.