By State Sen. Greg Goggans
Our newly elected Governor Nathan Deal has released his budget for the upcoming year. This is the budget year that everyone has worried about so much. Possibly the next bright spot is that tax collections are predicted to grow by 6% for Fiscal Year 2012 starting next July. Agency cuts of 7 percent on average coming on top of median cuts of 19 percent over the past two years will force closure of some facilities and reduction of some services. Higher education will take reductions totaling over $300 million including zero “growth” funds for institutions showing enrollment growth. Technical colleges also will not receive growth funds totaling $62 million and $19 million in cuts.
K-12 Education formula received net growth funds of $61.5 million but federal stimulus funds were not replaced. Systems were expected to have banked stimulus jobs funds of over $300 million received this past fall.
Governor Deal’s budget acknowledges a $1.53 billion deficit that must be filled. The main components of the “hole” include replacing most of the loss of federal stimulus funds (including enhanced Medicaid match) of $1.1 billion and $287 million to replace lost one-time funds in the FY2011 budget from the sale of part of the Georgia Environmental Finance Authority’s (GEFA) bond portfolio.
The major sources of funds to fill this deficit came from:
• 6 percent State Tax Revenue projection – $922 million
• $153 million-Savings from favorable bond sales rates
• Cuts to Regents totaling $173 million (added to no growth funding)
• $19 million cuts to Technical Colleges (added to no growth funding)
• Department of Education cuts totaling $225 million
• $9.5 million reduction in Public Health Grant-in-Aid to local governments
• $5.6 million cut to the Trauma Commission reflecting expected “super speeder” collections.
• $5.9 million in cuts to Department of Human Services
• $20 million in cuts to Dept. of Corrections from the closure of a prison
• $5.4 million cuts to Department of Natural Resources
• $132 million in cuts to other state agencies
What little new spending there was focused on supporting job creation, starting to meet water needs with reservoir development and meeting the Behavioral Health agreement with the U.S. Department of Justice.
These include:
• $5 million to support industry recruitment projects or by the Department of Economic Development
• $19.3 million in FY011 Amended to replenish the OneGeorgia economic development program
• $32 million in Bonds to support the harbor deepening project for the port of Savannah
• $45.7 million for reservoir development
• $23 million for water and sewer construction program
• $59.4 million in new funds for Behavioral Health per the state’s agreement with DOJ
BOND PACKAGE
Governor Deal has proposed the smallest bond package in recent years at only $562 million or 7.7 percent of prior year treasury receipts. The package is divided up into various departments and needs.
HOPE AND LOTTERY EXPENDITURES
Governor Deal has proposed appropriating only the amount of lottery dollars expected to be transferred from the Lottery Commission in FY12, a total of $832 million, using no reserves. This appropriation would leave $283 million in lottery reserves which are needed for cash management purposes. These realistic appropriations levels will force decisions to be made this session on reducing expenditures for lottery programs. The shortfalls include:
• HOPE Public colleges -$171.2 million
• HOPE Private colleges -$21.4 million
• HOPE Grant -$74.4 million
• Pre-K -$19.8 million
The Revenue Shortfall Reserve or Rainy Day Fund now stands at $116 million or about 2 days of state operations.
Please remember to contact me in my office on the issues that are affecting you and your area. I am here to represent you and it is an honor for me to work on your behalf. As always, I’d like to thank members of the Senate staff, who contribute regularly to my column.
Sen. Greg Goggans represents the 7th Senate District, which includes Atkinson, Bacon, Berrien, Clinch, Coffee, Echols, Lanier, Pierce and Ware counties and a portion of Cook County.
PRESS RELEASE
For Immediate Release:
January 21, 2011
For Information Contact:
Matt Colvin, Broadcast Director
matthew.colvin@senate.ga.gov
404.656.0028