Wednesday, March 29, 2017

Georgia Budget Primer 2017

Welcome to GBPI’s 2017 Budget Primer

Georgia plans to spend $23.7 billion in state funds raised through taxes and fees for the 2017 fiscal year. The budget plan anticipates a revenue increase of $1.9 billion, or 8.8 percent more than the prior year.

The overall increase in dollars appears dramatic compared to recent years but more than 40 percent of the growth comes from a transportation funding overhaul passed during the 2015 legislative session and took effect that July. Most of the other new revenue is consumed by needs of a growing and aging population. The effects of budget cuts imposed during the Great Recession linger, as the state struggles to provide a quality education, access to health care, human services and other essentials. The state’s 2017 budget adds $408 million more for K-12 education over the prior year. That includes another $300 million reduction to ongoing education austerity cuts. But restoring education funding to state standards remains a challenge, as this budget still falls about $166 million short measured by Georgia’s own formula. Education investment is just one of several opportunities for improvement detailed in these pages.

The Georgia Budget and Policy Institute’s Georgia Budget Primer 2017 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 of state government will also find this publication is an authoritative desktop reference during the 12-month fiscal year that starts July 1, 2016.

The governor proposed the 2017 state budget at the start of the Georgia General Assembly in January 2016. State lawmakers made minor changes to it before Gov. Nathan Deal signed the budget into law in May. Lawmakers will amend the 2017 state budget after the next legislative session starts in January 2017 to reconcile it with actual revenues and make other needed adjustments. Please continue visiting gbpi.org for up-to-date analysis of the changes.

Georgia’s 2017 state budget is the largest on record, as many media outlets reported when the governor signed it into law. At the same time, Georgia’s need to provide services to more people and budget obligations consume much of the new revenue outside of the new transportation initiative. The analysis that follows highlights some of the state’s recent progress and, more importantly, shows what more is possible.

Looking Ahead to Next Year

Gov. Nathan Deal’s ambitious education reform agenda got shelved at the outset of 2016, but appears certain to take center stage when the General Assembly convenes again in Atlanta in January 2017. Education tops only health care spending on Georgia’s priority list, both as a budget consideration and as an investment in communities across the state. Those two will likely be joined by proposals to tinker with the tax system as the Legislature debates the big challenges Georgia faces.

Comprehensive changes to education policies and to the 31-year-old formula the state uses to distribute funding among its 180 public school districts seem sure to provide a lively legislative debate in 2017. The good news is for the first time since recession-era cuts shorted public schools about $1 billion per year, the annual austerity reduction could be left in the past. Still, concerns include the possible adoption of a new formula without ensuring it matches funding levels needed to help students achieve the increasing standards the state requires of them.

Georgia lawmakers appear poised to take a first serious look at closing the state’s health insurance coverage gap next year since the 2010 federal health care law passed. More than 300,000 uninsured Georgians fall into a coverage gap as a result of the state’s decision not to expand Medicaid eligibility to working-poor adults. Accepting the substantial federal funding available provides access to a doctor and pumps billions of dollars into Georgia’s struggling health care system.

State lawmakers will work to make these critical investments and more this year while likely also debating a change to the tax system that could make it harder to pay for them. Georgia’s aging tax laws are in need of an update and one way is to target tax cuts through a Georgia Work Credit to help the people who can benefit most.

Education, health care and the well-being of children deserve top billing when state lawmakers return to the Gold Dome in 2017. The opening gavel provides a new opportunity for them to embrace what’s possible.

Click on the links below to browse the different sections of the primer.

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