Even with this one-time boost, year to date revenues are up only 6.1 percent. Although the 2013 state budget that lasts through June 30 is based on 4.1 percent growth, revenues need to grow at a minimum of 6 percent this year to generate enough money to pay for increases in K-12 school enrollment when the current budget is amended and allow for a minimum increase in the state’s rainy day fund, which is at historic lows.  With February and March revenue collections increasing at only 2.5 percent rates, the end of the year collections may be closer to 5 percent growth then the current 6 percent.

The continued moderate revenue growth is bad news for Georgia and its economy. Without a significant increase in revenue, Georgia will continue to struggle to fund schools, health care, public safety and other services at bare-minimum levels. Even then, additional cuts in other areas will be necessary to assure that our growing student population, rising health care costs, and pension obligations are funded.  

Georgia policy makers can cross their fingers and hope for a booming national economy to increase revenues or they can take steps to assure that funds are available for those things most important for a strong state economy: an educated workforce; a strong health, safety, legal and regulatory system and first-class transportation and communications infrastructure.

The farm bill, which is renewed every few years, directs funding for most federal farm and nutrition programs, including government support for U.S. farmers who grow our food, agricultural research, and SNAP.  While the farm bill is important to Georgia’s farmers, it also plays an essential role in the lives of low-income Georgians because of SNAP and other nutrition programs. 

Under the House version of the farm bill, nearly 2 million low-income people nationwide – largely children — would no longer be able to turn to SNAP.  With thousands of Georgians still struggling to find jobs in the slow recovery from the Great Recession, and SNAP already set for cuts this fall, the drastic additional cuts proposed by the House are unwarranted and unnecessary. 

The House farm bill’s harmful impacts go beyond its large SNAP cuts. More than 200,000 children would lose free school meals under the bill and the nutrition education program that teaches families using SNAP how to stretch their benefits to make healthy meals would face a deep cut.

The Senate version of the farm bill is far less harsh.  It cuts a smaller amount — about $4 billion — from the same nutrition programs, and does so in a way that would not take food assistance away from Georgians.

The full Senate is set to vote on its version of the farm bill next week.  The House may not vote on its version until early June. 

Georgia has three congressmen on the House and Senate Agriculture committees, which puts the state in a unique position to influence the bill as it moves forward in each chamber.  Rep. Austin Scott supported the drastic cuts in the House bill, while Rep. David Scott rejected them, during the House Agriculture Committee vote. Sen. Saxby Chambliss voted to approve the Senate version of the farm bill as a member of the Senate Agriculture Committee. 

Drastic cuts to nutrition programs should not be on Congress’ agenda.  And with more than 1 in 7 Georgia families participating in SNAP, Georgia’s congressional delegation should not support them. SNAP is good for families.  Adults get the nutrition they need to work, while children get the nutrition they need to concentrate and succeed in school. Seniors and people with disabilities get the nutrition they need to stay healthy and contribute to their communities.

The House farm bill’s deep cuts to SNAP and other nutrition programs threaten to make thousands of Georgians hungrier, less healthy and less productive, at the very time we need to do everything we can to support strong families that can help rebuild our economy. 

Unfortunately, the governor seems to have taken the opposite course this month in his treatment of two sales tax exemptions.

While he vetoed renewal of a sales tax exemption for food donated to food banks, items purchased by volunteer health clinics and Goodwill Industries’ job training service – all nonprofit efforts —  he signed off on renewal of a sales tax exemption for aircraft repair that basically benefits one profitable company, Gulfstream.  In his veto message the governor said the sales tax exemption for the nonprofits should be reviewed by the Governor’s Competitiveness Initiative Task Force to determine “whether economic or noneconomic justifications exist for the exemptions to be renewed.…”

While it is always wise to determine whether tax breaks are justified and doing what they’re supposed to do, the principle shouldn’t be selectively applied. The aircraft repair tax break will cost the state more than $5 million during the budget year that begins July 1, to largely boost the bottom line of a single company, and was renewed without any independent analysis of its economic benefits. 

Meanwhile, the tax break for the nonprofits would have cost the state less than half as much — $2.2 million next budget year  – and benefits numerous nonprofit organizations across the state.  The sales tax exemption for food banks alone would have resulted in more than 800,000 additional meals for Georgia families.

With the obvious public benefits gained by food banks serving more meals, health clinics treating  more patients, and Goodwill providing job training to the unemployed, the governor should have set a higher bar for the uncertain benefits of the tax break for Gulfstream.

If nonprofit organizations are required to prove the public benefits of their tax breaks, corporate tax breaks should be held to the same standard.  

Tax revisions passed by the Georgia Legislature and signed into law by Gov. Nathan Deal this year will cost an estimated  $168 million over five years, draining more scarce resources on top of years of damaging cuts to schools, job training, health care and other services that bolster Georgia’s economy.

Most of the short-term cost, $125 million in 2013-2014, is due to tax changes enacted on the national level, which trickle down to Georgia because state and federal tax laws are closely linked. Almost all of the longer-term costs, $43 million in 2015-2017, are attributable to a new tax break for Georgians who buy and register used cars under the state’s new system for taxing automobiles. The remaining revenue loss is caused by four bills that revise various tax breaks and credits for tourism promotion, business investors and other specific purposes.   Download the full report.

Contrary to what some in the anti-expansion camp argue, the study – which updates findings from an earlier look at how Medicaid benefited some previously uninsured people in Oregon – actually highlights some fantastic successes. According to one of the authors of the study, the new round of findings actually “discredit” the idea that Medicaid is not good insurance.  

For example, the study found that the newly insured Oregonians were more likely to get a variety of health care services, including preventive care, which could make them healthier down the road and less likely to need more expensive treatment for long-neglected conditions.

In addition, the study shows quite clearly the many ways in which Medicaid improves financial security for low-income individuals. Catastrophic out-of-pocket costs were almost completely eliminated and many saw their medical debts decline significantly. This is precisely the way insurance is supposed to work.

The researchers found significant improvements in diagnosing depression and diabetes among the group they studied – both costly and potentially debilitating conditions that can be more expensive to treat the longer they are ignored. Depression among the group fell by 30 percent.

Instead of looking at all of the study’s findings, opponents of Medicaid expansion have latched on to the one that no “statistically significant” improvements were found in a handful of medical conditions, such as high blood pressure and high cholesterol, over two-years. Despite the claims of the critics, the lack of statistical proof that outcomes improved is not the same as proof of Medicaid’s ineffectiveness. On the contrary, the substantial benefits the study highlights the many arguments in favor of expansion, even if some findings also motivate improvements to the quality of health care people receive which will enable Medicaid to be more effective than it already is.

Dr. Heidi Allen, part of the research team working on the Oregon study, was one of the speakers at a GBPI forum last fall on Medicaid expansion. Here’s what she had to say when I asked her about how the latest study is being used by some to disparage Medicaid:      

Health insurance is a financial product, meant to protect people from catastrophic financial harm because our need for medical care can be unpredictable – this assures an unexpected trip to the emergency room won’t compete with necessities, such as rent or food.  For people with low incomes, health insurance also reduces the financial barriers to care, providing access to preventative services and a doctor when we are ill.  On both counts, Medicaid performed very well. Some have argued that Medicaid isn’t very good insurance – our study findings discredit that claim.  That said, knowing what is working well and what isn’t can give states implementing the ACA opportunities to innovate and our findin

The forum, featuring Huffer and a panel of local experts in education and social support services, attracted an audience of more than 80 people to GBPI’s Spring Policy Forum at the Carter Center.

If you missed the forum, or would like to revisit some of the topics covered, the keynote presentation, news coverage and a photo gallery are shared here.

Agenda

• Spring Policy Forum Agenda

Presentations

Joan Huffer, keynote speaker
Director of the Federal Budget Initiative, Center on Budget and Policy Priorities

Huffer told the forum audience that since 2010 the federal government has done well to reduce the deficit primarily from cuts to federal programs and without sequestration. As financial details of the sequester’s impact on Georgia are slowly being revealed, the indiscriminate five percent cuts across the board to non-defense discretionary funds will cause real pain. Download the presentation.

Additional Resources on Federal Budget Negotiations

The thoughtful questions from the audience at the GBPI Spring Policy Forum made clear people concerned about this country’s future have a real appetite for more information about what’s inside the various pending federal budget proposals. It’s a subject that was too complex to sort out in a wide-ranging, two-hour discussion.

But recent reports can help you cut through some of the rhetoric that tends to cloud understanding of the budget proposals that on the table.

The recent report “State-by-State figures on Obama’s Proposal to Limit Tax Expenditures” takes a close look at how the president’s budget plan works. Prepared by Citizens for Tax Justice, the report analyzes proposed changes to tax rates, deductions and other details contained in the budget plan.

A compilation of analysis of the competing vision of U.S. House Budget Chairman Paul Ryan shows his proposal to dramatically cut federal spending will prove devastating to low-income people and shift costs of social services to local governments. Prepared by the Center on Budget and Policy Priorities, the reports contrast his recommendations with other plans, such as the more even-handed approach recommended recently by Senate Budget Committee Chair Patty Murray.

The Saporta Report Covers Keynote Address, Panel Discussion

Read the full story in The Saporta Report:  Federal cutbacks hurt, but Georgia’s safety net can respond creatively

Twitter Feed During the Forum

• Deficit at the federal level caused by recession, low revenues. Tax cuts, war spending add 6 trillion dollars to deficit. #sequester
• Sequestration is indiscriminate, a terrible solution. The only way to get rid of it is through political pressure. #sequester #gapol
• Georgia ranks 34 for willingness to contact elected officials. We cannot let officials off the hook for this mess. #sequester #gapol
• 82% of kids in @ClarkeCoSchools are on free, reduced lunches. You cannot educate hungry, unhealthy kids says Lanoue. #sequester
• Public schools are the core of the community. If your school is not making it, fix it. Do not pick up and move, says Lanoue #edchat
• We have a budget problem, not a crisis. We have options, we need to advocate. We have a role to play as citizens says our Essig. #sequester

Photo Gallery

Joan Huffer, director of the Federal Budget Initiative at the Washington, D.C.-based Center on Budget and Policy Priorities, is our guest blogger this week.  

This country is in the middle of an historic debate over the federal budget. The decisions that result from this debate will have a significant impact on almost 10 million people who call Georgia home.

State and local governments rely on federal resources for many public services including, education; building and repairing roads, bridges, airports, and public transit systems; ensuring communities have clean drinking water; protecting public safety; providing health care to the most vulnerable including about 35,000 seniors in nursing homes; reducing homelessness; providing job training to technical college students and others and responding after major tornadoes and other disasters. The decisions made in Washington will have a significant impact on resources for many programs and services in Georgia.

In fact, a large part of the federal budget outside of Social Security, Medicare, defense, and interest payments on the national debt — 41 percent of what’s left — consists of grants to states and localities.

You have heard a great deal about the growth in federal deficits and the debt since 2000 and the seemingly endless battles over what to do about it.  It may come as a surprise to learn that Congress and the president have actually made quite a bit of progress in reducing the deficit.  Since 2010, legislation has been enacted that will reduce federal deficits by $2.75 trillion over the next decade. That doesn’t count the across-the-board spending cuts, known as sequestration that went into effect on March 1 of this year. 

The full impact of these cuts has yet to be felt. Within a few years, the part of the budget that funds many programs state and local governments rely on will shrink to its lowest levels as a share of the economy in nearly 50 years.  Almost a quarter of the resources that come through the federal appropriations process go directly to state and local budgets. 

This summer, the legal limit on the amount of money that the federal government can borrow will once again be reached.  Congress will have to take steps to prevent the country from defaulting on its obligations.

Some members of Congress view the debate over this must-pass legislation as an opportunity to force very deep cuts in federal funding for a range of initiatives, on top of the cuts that are being made and will have to be made under existing laws. 

That’s a bad idea. Unless significant new revenue is included, as the president is calling for, a major legislative package to shrink federal deficits almost certainly will cut deeply into state and local aid. This would make life harder for a lot of people in Georgia and shift more of the cost of paying for schools and other services to the state.

These cuts would come on top of the reductions caused by laws that already passed. Continuing down this path means failing to educate the state’s children, allowing Georgia’s roads and bridges to crumble and standing by while water quality and other public necessities decline. That is not a recipe for strengthening Georgia’s economy and providing opportunities for people in the state.

The country clearly needs to continue to work hard to create a responsible and sustainable fiscal path. But care should be taken to make sure the solution isn’t worse than the problem.   

Joan Huffer is director of the Federal Budget Initiative at the Center on Budget and Policy Priorities. She is the keynote speaker at the Georgia Budget and Policy Institute’s 2013 Spring Policy Forum.