GBPI is proud today to publish the latest edition of our annual comprehensive analysis of the state’s financial blueprint, the “Georgia Budget Primer 2015.”
This primer is a clear explanation of the state’s revenue collections and its current spending plan through next June. The 2015 edition tells the story of a state that continues to shortchange investments in schools, communities and services crucial to the quality of life of its people. State revenues are projected to increase for the fifth consecutive year in 2015, but if you adjust for inflation and consider population, they will still trail 2007 levels. Revenues are growing just fast enough to avoid new budget cuts that grew commonplace in recent years, but not nearly fast enough to restore government services most important to return the economy to its pre-recession strength.
The 2015 Georgia budget includes $314 million as a portion of $1.1 billion shortfall in the state’s K-12 education funding formula, but the state’s own criteria calls for $747 million more. As students across the state head back to school this month many will still be greeted by larger class sizes, fewer electives, and outdated books and materials. Years of budget cuts are causing students in our universities, colleges and technical schools to pay increased tuition. Meanwhile, many of these postsecondary students are attending larger classes taught by part-time instructors. The quality of education across the board suffers. That will inevitably hurt Georgia’s economic development prospects.
Agencies throughout state government struggle to meet the demand for their health, safety and regulatory functions, let alone the basic customer service that Georgians expect. Annual rounds of budget cuts shrunk the ranks of state employees by more than 14,500, or almost 18 percent, over the past six years. While the number of state employees plummeted, the demand for public services increased with a growing population.
Georgia’s 2015 budget bypasses billions of federal dollars the state could use to extend health coverage to more than 500,000 Georgians through Medicaid expansion. Expanding Medicaid income eligibility is a great deal for the state, since the federal government pays 100 percent of the cost through 2016 and at least 90 percent after that. The health benefits and the economic boost expansion could deliver to Georgia are undeniable.
State leaders say we cannot afford both a world-class education system and a health system that gives all Georgians access to quality care. These are false choices. Georgians can find the money to invest in several building blocks of the economy at once. While education, health care and quality of life are the most important factors in a strong state economy, Georgia continues to rank near bottom in all three. Smart tax reform could modernize Georgia’s tax code to increase revenues and give tax relief for many workers. Georgia can still remain a low tax state and make the investments most important for broad-based economic growth. Georgia leaders have a choice, they can continue on the road to mediocrity or they can embrace what is possible and lead Georgia toward excellence in a 21st century economy.