Record State Budget Still Reflects Austere Approach

2017 Budget CoverYou’ve no doubt heard reports that the $23.7 billion state budget proposed by Gov. Nathan Deal for the 2017 fiscal year starting July 1, 2016 represents a high water mark for state spending in a single year. It’s true that a healthier economy, population growth in Georgia and the willingness of lawmakers last year to raise nearly $1 billion in new revenue for transportation fixes helped make possible a spending plan that covers more state needs than we saw during the recent recession years.

Sure, the governor proposes a $1.9 billion increase in total state spending compared to the 2016 budget approved last year. But that only returns overall state spending to pre-recession levels measured on a per-capita basis. While the overall increase in dollars appears dramatic, more than 40 percent of the growth comes from a transportation funding overhaul passed during the 2015 legislative session.

The plan creates new transportation-focused revenue starting with the 2016 fiscal year, but did not include this revenue in the state’s spending plan signed into law last spring. Compared to the governor’s recently amended budget plan for the 2016 fiscal year, which reflects new revenue from the transportation package, the 2017 spending plan relies on revenue growth of about 4.2 percent in the state’s general fund.

In addition to the new transportation money, growth in the proposed budget continues to reduce the austerity cuts to Georgia’s K-12 education system that have long caused public schools to increase class sizes, furlough teachers and shrink attendance calendars. It might seem like those lean years are in the rear view mirror, but the reality is 40 school districts still plan to furlough teachers this school year due to tight finances.

Still, an austerity cut of $166 million persists for public schools. And local school districts now spend $400 million annually to pay health insurance costs for school bus drivers, custodial staff and other non-certified employees after the state stopped paying that tab in 2012.

Our new report, “Overview of Georgia’s 2017 Fiscal Year Budget,” analyzes the 2017 state spending plan, the amended 2016 proposal and sets the stage for the series of deeper dives GBPI’s analysts will take in coming weeks when we’ll report on budgets for education, health care and human services.

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