Welcome to GBPI’s 2018 Budget Primer

Georgia plans to spend $25 billion in state funds for the 2018 fiscal year. The budget plan anticipates a revenue increase of $1.26 billion, or 5.3 percent more than the prior year.

Keep in mind when you hear Georgia’s $25 billion 2018 budget is record-setting that 80 percent of the $1.3 billion increase over the year before isn’t discretionary. Unless the state’s economy sinks, things like population growth and rising retirement benefits for state employees will almost always make the cost of running the state higher from year to year.

You’ll find a guide to state spending for public services and other needs critical to the quality of life for people across Georgia in the pages that follow.

The state’s 2018 budget leaves K-12 education spending $167 million below the state’s funding target. It includes a renewed health care provider fee that aims to raise $900 million to stabilize the state’s Medicaid system. Health care is a state expense second only to education. The 2018 budget also offers new resources to support Georgia’s children and families, increasing the salaries of child welfare workers by 19 percent with $26 million designed to tamp down the 29 percent turnover rate among caseworkers in the Department of Family and Children Services.

The Georgia Budget and Policy Institute’s Georgia Budget Primer 2018 is a clear explanation of the state’s revenue collections and its spending plan. It includes basics to help a novice understand the budget’s complexities. Seasoned observers will also find this publication is an authoritative reference during the state’s 12-month fiscal year that starts July 1, 2017.

The governor proposed the 2018 state budget at the start of the Georgia General Assembly in January 2017. State lawmakers made minor changes to it before Gov. Nathan Deal signed the budget into law in May. Lawmakers will amend the 2018 state budget after the next legislative session starts January 2018 to reconcile it with actual revenues and make other needed adjustments. Please visit www.gbpi.org for up-to-date analysis of the changes.

An extended run of healthy annual state revenues resulted in a 2018 spending plan that includes more than a few positives. It’s a welcome step on the way to building a more inclusive economy, a place where all Georgians get an opportunity to reach their full potential.

Looking Ahead to Next Year

For years Georgia struggled to recover from the recession as the debilitating effects of budget cuts lingered for public schools, its rural health care system and its ability to set aside savings to prepare for the next economic downturn.

At the start of 2017, Gov. Nathan Deal pointed to the state’s improving fortunes as he unveiled Georgia’s 2018 budget. The state’s reserves now top $2 billion. The 2018 spending plan includes pay raises for law enforcement and child welfare workers. The 2018 budget projects spending $1.9 billion on roads and bridges, a continued commitment of increased spending to maintain the public structures that keep Georgia’s economy moving.

Now it is time for Georgia to find ways to increase investments in other building blocks of a sound state economy. Georgia is still stuck on the wrong end of many national rankings when it comes to education, health care and other measures of quality of life.

Lawmakers can make progress on several fronts with a modernized approach to tax strategy. One way to help families worried about falling behind is to carve out a tax cut for Georgia families that work but still struggle to make ends meet in low-wage jobs. A Georgia Work Credit, or state Earned Income Tax Credit, provides a bottom-up tax cut to workers earning low wages. More money in the pocket helps workers and their families and helps ensure a reliable customer base for small businesses and local economies.

The state’s future is developing in its public school and college classrooms. Georgia can’t quite eliminate the persistent underfunding of K-12 education, a lingering legacy of the recession. Lawmakers left a $167 million austerity cut in the 2018 budget. The state can do more to reach its goal of increasing the number of Georgia college graduates by 250,000 by 2025. Helping qualified students from low-income families afford college through need-based aid is a sustainable strategy for the state to reach its graduation goals.

Georgia is in much better shape than peer states that slashed revenues even as the economy contracted. It is time to use that economic health to build momentum with new investments in our workers and communities. A solid foundation is set. Georgia can build on it to create a more inclusive economy where everyone participates and thrives.

Click on the links below to learn about different policy areas of the budget.

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Taifa Smith Butler
As executive director, Taifa provides GBPI’s organizational vision, inspiration and strategic management. She holds a bachelor’s in politics and economics from Mount Holyoke College and a master’s in public management and policy from the Heinz School of Public Policy and Management at Carnegie Mellon University, with a concentration in economic development and financial management.