Budget 101

What is the Georgia State Budget?

Georgia’s state budget is an annual spending plan that decides how the state will distribute public funds. It is a bill written by state legislators, under a revenue estimate issued by Georgia’s governor that caps the amount that can be spent and outlines the sources of funding raised. It is separate from the federal budget and local budgets, which raise and spend money for different aspects of public life.

Each year, the General Assembly passes two budgets, an amended one for the current fiscal year, which adjusts funding levels based on enrollment fluctuations and state revenue collections, and a full budget for the upcoming fiscal year. As part of the budget, lawmakers can also opt to spend down funds from the state surplus accounts, which are generated when revenues exceed spending.

The budget is not just the numbers it contains. The allocations in the financial document show what lawmakers decide to prioritize.

How is the Georgia State Budget Funded?

Since 1982, the state budget has been primarily funded by personal and corporate income taxes, with sales taxes as the next largest source of revenue.

Income taxes help balance the regressive effects of sales taxes and fees by allowing the state to collect a proportionate share of taxes from the wealthiest earners and most profitable corporations. A healthy income tax is also less sensitive to economic downturns, which can lead to sharper declines in sales tax revenues.

Other items that contribute to the state budget include things such as federal funds and grants that cover specific programs and agency funds raised through sources like tuition and fees charged by the state’s universities and technical colleges.

Who Benefits from the State Budget?

Georgia’s budget directly affects the quality of life for every single Georgian across the state. It does many things including providing health care coverage and services through Medicaid and PeachCare, educating our PreK-12 students and those enrolled in higher education or technical institutions, employing teachers, administrators and many other state workers. It paves many of our roads and helps feed Georgians by contributing to SNAP administration costs.

How Does the Budget get Decided?

Lawmakers are constitutionally obligated to pass a balanced state budget each year.

1. In early summer, the Governor’s Office of Planning and Budget (OPB) sends guidelines to state agencies so each can prepare their requests.
2. Each agency prepares its requests and gets board approval if applicable.
3. Agencies submit all requests for the current and upcoming fiscal year to OPB by September 1.
4. The governor, OPB staff and agency leaders review and assess current and new budget requests.
5. The governor works to provide a revenue estimate for the current and upcoming fiscal year. This revenue estimate predicts how much money the General Assembly will have to spend, and they must budget based on this number. The ability to set a revenue estimate gives the governor distinct power to cap the amount the state will spend overall.
6. The governor finalizes and presents the executive budget proposals and revenue estimate by mid-January.
7. The appropriations committees in the Georgia House of Representatives and Senate hold budget hearings for the current and upcoming fiscal years.
8. The House writes its version of the state budget using the governor’s executive budget as a starting point and approves it.
9. The Senate reviews the House-passed budget for the current and upcoming fiscal years, makes changes, then votes on its version.
10. The Lieutenant Governor and Speaker of the House appoint a Conference Committee made up of three members from each chamber (six in total) to negotiate a compromise version of the budget.
11. The House and the Senate each vote to approve the final version of the state budget.
12. The governor has 40 days from the end of legislative session to sign the budget bill into law and may veto specific line items or issue additional instructions to state agencies.

How can Georgians Have a Say in Our Budget?

The budget is funded by taxpayer dollars and is written by Georgia’s elected leaders. It starts with electing state representatives, state senators and executive officers who reflect our own values. Once leaders are in office, communicating with them throughout the year and expressing our priorities, following their actions during General Assembly’s legislative session and contacting their offices to share your concerns can help them to write a budget that reflects the real needs of all Georgians.