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by James Salzer, The Atlanta Journal-Constitution
Image credit: Unsplash/CC0 Public Domain
Image credit: Unsplash/CC0 Public Domain
Weeks after it became clear the state would post a massive annual surplus for the third straight year, Gov. Brian Kemp told state officials they could ask for more money for next year’s spending.
Their budget requests — reviewed by The Atlanta Journal-Constitution — show they took Kemp’s words to heart.
Authorities have demanded massive increases in health care spending, for pay raises, to fight crime, to improve prisons… and in some cases to make back some of the money that either the General Assembly or Kemp cut during the budget process earlier this year.
That included the $66 million that lawmakers cut from the University System of Georgia during a dispute over a contract with a medical school and some of the money they cut from public television and radio.
If Kemp and lawmakers go along, it would mean higher salaries for senior judges and prison and mental health workers, more money to improve bandwidth for schools and more staff for a wide range of agencies, from the county extension service to the regulatory public service commission the federal health program for the poor, disabled and elderly.
The demands are just that: Authorities are calling on the state, which has been on a fiscal spree for several months since the start of the COVID-19 pandemic, to spend billions of dollars more by mid-2025. Kemp will consider the requests as he puts together his proposals for the 2024 and 2025 half-year budgets. The General Assembly then decides what is approved and what is not and sets its own priorities.
But the requests show where agency leaders — many of whom were appointed by Kemp — believe the state needs to put the additional billions of dollars it has raised.
Some of the requests caught the attention of Senate Appropriations Chairman Blake Tillery, R-Vidalia.
“I was a little surprised at the dollar amount of applications since inflation is causing a slowdown in the economy and revenues,” he said. “We will definitely crunch these numbers to determine needs and evaluate the return on investment for the state’s taxpayers.”
Growth in state revenues — mostly from income and sales taxes — began slowing earlier this year after Tillery reported a “sugar high” of cash receipts from mid-2020 to late 2022.
The state took in over $5 billion more than it spent in the 2023 fiscal year, which ended June 30. Last year it was more than $6 billion and the previous year it was almost $4 billion.
Kemp has called on lawmakers to return some of the money to Georgians in the form of income and property tax relief, and the General Assembly has enthusiastically supported the idea. This trend is likely to continue during the 2024 session starting in January.
The revenue boom until the beginning of 2023 allowed the state to accumulate money in reserves.
The surpluses have also helped the state increase salaries for state employees and teachers and expand services in areas such as mental health and substance abuse programs, law enforcement and education. Lawmakers budgeted a record amount of spending for K-12 schools this year.
Cuts along the way
While Kemp and General Assembly leaders have increased spending, they have also consistently budgeted less than the state brought in.
In March, lawmakers cut spending at some agencies, such as the university system and public broadcasting.
In May, Kemp cut more than $240 million in spending after warning that the country’s economic situation was uncertain and telling lawmakers that the budget they approved had unbalanced areas. The state constitution requires a balanced budget.
Many sectors of Georgia’s economy remain strong, but growth was so enormous from 2020 to early 2023 that sales growth is unlikely to exceed this period.
To keep fuel prices low, Kemp suspended collection of the state gas tax, as he did last year. But that means the state has to find money to fund road projects funded by the gas tax.
The first phase of a state income tax rate cut that lawmakers passed in 2022 is beginning, which could reduce income tax revenue next year.
Still, the governor was confident enough to allow officials to ask for a 3% spending increase on top of the higher costs to account for increasing enrollment in programs such as Medicaid – the health program for the poor, disabled and elderly – and education carry.
The agency that runs Medicaid called for an increase of more than $1 billion to the program and nearly $3 million to hire more staff to monitor and evaluate the partnership with private health care providers. The mental health agency called for significant increases in several areas, including money to bring more psychiatric hospital beds online.
Chief justices asked for $20 million to increase their salaries, an issue lawmakers debated in the mid-2010s.
Two programs that provide grants for business growth — mostly in rural Georgia — sought about $250 million. The prison system asked for $150 million more to fund inmates’ health care and $2 million more beyond the revised budget and the 2025 budget to provide prisoners an additional meal on the weekend.
The Georgia Bureau of Investigation asked for more money to increase crime lab staffing and medical examiners, as well as $316,000 to provide funding for sexual assault nurse positions. That’s about a quarter of the funding Kemp cut in May for employees of sexual assault centers.
The Board of Regents has been one of the more aggressive agencies, demanding $119 million from Kemp to pay off facilities debt currently funded by university system tuition and to restore $66 million that the Legislature in March had cut from its budget.
The cut represents just over half of the $105 million Kemp and lawmakers approved for a new electronic medical records system for the Medical College of Georgia, part of Augusta University. Senate leaders questioned those costs and approved them amid discussions that encouraged private Wellstar Health System to partner with AU Health System. Wellstar completed its acquisition of the AU system in August.
The university system also requested $389,000 of the Legislature’s $1.17 million budget cut to Georgia Public Broadcasting.
Danny Kanso, senior financial analyst at the Georgia Budget and Policy Institute, which generally advocates for increased state spending on programs, said top priorities should include strengthening our public schools, closing the health insurance gap and addressing persistently high attrition rates for state employees.” by increasing salaries and adjusting staffing levels to state demand.”
Kemp and lawmakers have increased salaries for teachers, university employees and state agency employees in recent years. But some agencies still have major turnover problems, as became clear in May when the then-head of the Georgia State Patrol pushed lawmakers to create a pension system for troopers to incentivize them not to leave for other jobs.
Kanso said the state should use additional money to give schools more resources to support low-income children and to give systems more money for student transportation.
“There are currently an estimated 6,300 buses on the road in Georgia that have been in use for 15 years or more – that’s about one in three buses on the road,” he said. “Georgia should ensure these buses are replaced as quickly as possible and use this opportunity to align counties on a statewide replacement plan.”
2023 The Atlanta Journal-Constitution.
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