The 2010 Legislative Session has been very long compared to the past few years. After April 20,there are three legislative session days remaining. The General Assembly confirmed that our last day of the 2010 Legislative Session will be April 29.
One of the most complex budget years in the history of the state, we have made necessary, but difficult, choices as we reduced spending and therefore the size of our government. When the economy does poorly, it not only affects individuals, families and businesses; but, the economic downturn has also had an impact on our state government and budget. State revenue collections have decreased approximately $4.5 billion in the past two years.
If adjusted for both population and inflation, the FY2011 budget is near mid-1990s levels. After months of hard work and thoughtful consideration about the budget for the state, the House passed a very slimmed FY11 budget. It is now being reviewed by the Senate.
Making these kinds of cuts is not easy. To account for this decline, most agencies are taking reductions between 7 percent and 11 percent. Other cuts included eliminating $45.6 million in programs and subprograms, eliminating $60.5 million in contracts and activities and removing 4,500 currently authorized state positions.
Despite these reductions, the House of Representatives continues to prioritize K-12 education funding. We restored $100 million in Quality Basic Education funding and fully funded K-12 enrollment growth and teacher training and experience. We were also able to restore a base level of funding for the Regional Education Service Agencies (RESAs), which had been proposed for elimination by the governor. We also found a way to realize efficiencies but still provide the vital functions of Math Mentors, Educational Training Centers and school improvement by funding these functions through the RESAs.
As a result of our protective measures, the Department of Education now comprises 46 percent of the state general funds. This percentage has increased from 43 percent in FY09, though state funding overall has been reduced by 20 percent. To further show our commitment, the fiscal year 2011 budget does not include any state mandated furloughs for teachers and other state employees.
Behind the Department of Education, the University System of Georgia accounts for the second largest percent of the budget. Although some cuts were necessary, we ensured that reductions were not excessive in order to keep tuition affordable for Georgia students. A total of almost $150 million is designated toward enrollment growth funding for the University System of Georgia and Technical College System. Another $22.4 million is restored to the Tuition Equalization Grant program.
While measures were taken to preserve the future of higher education, the lottery expense continues to grow. This is due to economic downturn and recent layoffs, which have encouraged people to return to school. The House preserved the future of the lottery by reversing a proposal to supplant state general funds with lottery dollars. This action will allow continued funding for Georgia students while leaving lottery funds dedicated to funding our HOPE and Pre-K programs.
The Department of Community Health is the third largest percentage of the FY11 state budget. While some cuts were needed, Medicaid and Peachcare will continue to remain fully funded. Six state licensure inspector positions also will be funded to eliminate a backlog and create a more efficient system for licensing health care facilities. The sooner these facilities are licensed, the sooner they will be able to provide care and contribute to the economy.
Despite the economic downturn, responsible fiscal management helps Georgia continue to maintain an AAA bond rating. Unlike other states, we have maintained a balanced budget without raising taxes. Forty-four other states are experiencing shortfalls for FY 2011, totaling between $103 billion and $108 billion. Thirty states have raised taxes since the recession began. Arizona has even proposed eliminating kindergarten, the Department of Juvenile Justice, and their Kids Care program, which is similar to Georgia’s Peachcare.
Although we all have to make tough sacrifices in these difficult times, I am pleased that we have not had to take such drastic measures in the state of Georgia.
The House completed a daunting task and a major accomplishment as the members balanced and passed the fiscal year 2011 budget, House Bill 948. The FY11 budget included a total budget for the state of $17.8 billion.
Times are difficult for many people, not only within our state, but throughout the country. Over the past two sessions, the General Assembly has had to downsize the budget for the state and include cuts that have not been easy. The General Assembly has decreased the size of government and the FY11 budget is near the budget levels from 2005. The only way to balance our budget for the state was to reduce spending.
Just as the state has had to do, we are all tightening our budgets and reducing our spending. Bringing some form of relief to the families in Georgia has been a topic greatly discussed. The General Assembly passed tax relief this week with HB 1055. Labeled by some as the “Georgia Taxpayer Relief Act of 2010,” the passage of this legislation brings needed relief to taxpayers.
This act, to be phased in over five years, would eliminate the senior income tax on all retirement income for tax payers age 65 and older. Also, the measure eliminates the state quarter mill property tax. This will get the state out of the property tax business and provide manageable and meaningful tax relief to Georgia property owners. The state quarter mill of property tax will be phased out over a five-year period beginning in 2012.
Once both tax cuts are fully phased in, Georgia taxpayers will save roughly $236 million a year. Another aspect of this act is that it will adjust outdated state fees and fines. In analyzing our budget and trying to find ways to save, we found that at many times the fee charged by the state for services does not cover the cost of the service. This difference was passed on to the taxpayers of Georgia; however, under this Act the issue will be addressed and those using the services will pay for it.
The Georgia Taxpayer Relief Act of 2010 will bring meaningful tax relief to the taxpayers within our state.
As we approach the end of the 2010 legislative session, please feel free to contact me.
Contact information:
Rep. Ann R. Purcell
Coverdell Legislative Office Building
Suite 504
Atlanta, GA 30334
(404)656-0188
ann.purcell@house.ga.gov
