ATLANTA, GEORGIA – Danny Kanso, Senior Fiscal Analyst at the Georgia Budget & Policy Institute, has recently published a report on Georgia’s staggering surplus of $16 billion, as of the close of Fiscal Year (FY) 2023. Managing a surplus of this scale creates new challenges outside the traditional framework of Georgia’s system of annual budgeting and leaves the state in a strong position to make unprecedented and equitable investments in the well-being of its residents.
Georgia’s surplus is a direct consequence of successive years of persistently low revenue estimates. Kanso’s report emphasizes that now is the time for the state to invest in crucial areas, focusing on affordable child care, upgrading thousands of school buses, and addressing workforce needs.
This financial milestone represents a recent shift in Georgia’s finances. Over the last decade (FY 2009 to 2019), Georgia typically ended the fiscal year with an average of $270 million in surplus, which was used to rebuild the Rainy Day fund (Revenue Shortfall Reserve) after it was depleted during the Great Recession. In 2019, the state achieved a record balance of $2.8 billion, equivalent to 11% of the state’s revenues. However, from FY 2021 to FY 2023, the equivalent of 15-22% of the funds allocated by the General Assembly remained unused at the end of each fiscal year. This staggering trend created a cumulative surplus of $15.5 billion over three years, on top of the $2.7 billion in reserves built over nearly a decade.
These surplus funds have allowed Georgia to fill the Revenue Shortfall Reserve (RSR) up to its cap of 15% of revenues ($5.4 billion) for the first time. Additionally, the funds covered the expenses of two years of modest income tax rebates and back-filled revenues lost due to a 10-month suspension of the gas tax.
The question now facing Georgia is how it will choose to invest these unprecedented funds. Will the state prioritize the well-being of its residents by making equitable investments that address crucial needs, or will it opt for a different approach? The future of Georgia’s residents hangs in the balance.
Statement by Danny Kanso, Senior Fiscal Analyst, Georgia Budget & Policy Institute:
“The state has the chance to make a real difference in the lives of Georgians by investing in critical areas such as child care, education, and workforce development. With $11 billion in undesignated reserves, we have the resources to make historic investments that will benefit all Georgians for generations to come. But lawmakers need to act now, and they need to act responsibly. The people of Georgia deserve to know that these public dollars are being used wisely and effectively, and that they are being directed towards the areas of greatest need. State leaders must work together to make the most of this once-in-a-generation opportunity to build a brighter future for all Georgians.”
To access the full report, please visit the following LINK.