When retirees started to wonder if they would receive their Social Security checks on Aug. 3, the federal budget crisis finally began to sink in to average citizens. The debate on raising the debt ceiling brought into sharp focus the United States’ fiscal policies and held this country up to the same light as other economies around the world. If nothing else is accomplished from the recent debate, it has elevated the understanding of average citizens of the necessity of this country to change the direction of spending excesses and get its fiscal house in order.
Of course, the recession complicates things, but it is becoming a “chicken and the egg” situation when recovery is held back by people’s lack of confidence in the future due to the country’s fiscal situation. So the argument that the U.S. should not reduce spending due to possible negative effects on the economy lacks validity in my view.
Assuming that fiscal restraints will actually begin to take effect and Congress begins to implement budget cuts, a legitimate question is “what is the potential effect on Georgia, its budget and citizens.”
The answer is “a lot.” Even though state leaders always complain that this state does not get back as much in tax dollars as it sends to Washington, the federal budget permeates every nook and cranny of this state.
Here is just a quick review:
Federal funds by state agency-a partial list:
Dept. of Agriculture—$6.6 million
Dept. of Community Affairs—$167.4 million
Dept. of Behavioral Health— $162.7 million
Dept. of Community Health— $5.1 billion
Dept. of Education—$1.8 billion
Governor’s Office—$44.02 million
Dept. of Human Services—$1.07 billion
GBI—$27.2 million
Dept. of Labor—$345.4 million
Dept. of Natural Resources—$54.0 million
Dept. of Public Health—$ 471.2 million
Dept. of Public Safety—$37.4 million
Technical College System—$70.8 million
Transportation—$1.21 billion
Veterans Services—$18.2 million
About $10.8 billion in federal funds flow through the state budget and are dispensed through the state appropriations process.
A second huge source of federal funds in the state is through Federal Benefit Programs, which are paid to individuals and to medical providers. These include Social Security and Medicare. Social Security payments total over $15 billion yearly. That’s roughly the same amount of revenue the state takes in! Medicare expends almost $10 billion to providers of health care to Georgia recipients. Military and federal civilian retirement payments total about $3.8 billion. Out of 10.4 million state citizens, 1.4 million receive Social Security payments and 1.2 million benefit from Medicare.
A third source of federal expenditures in the state involves federal procurement contracts for supplies and services, which totaled $11.2 billion in FY2009. Federal employee salaries for military personnel total $8.8 billion and for civilian salaries for all sorts of federal agencies in the state total $4.8 billion. Federal research and other grants for Regents institutions total $1.2 billion.
Totaling everything we can think of, the federal governments’ total yearly expenditures in Georgia approach $90 billion. This total dwarfs the state funds budget of the state at $18.3 billion.
Georgia’budget—$10.8 billion in federal funds – 31.9 percent
Georgia has a total funds budget for FY2012 of $34,059,167,567 ($34.0 billion). Of that total $18.2 billion are state funds raised through taxes and fees. The next largest portion of the budget, $10,857,824,765 ($10.8 billion) comes from the federal government through a wide range of programs, entitlements and grants.
These federal funds range from $5 billion in Medical Assistance (Medicaid) to $1.14 billion in highway funds to $32 for “Enhanced Assessment Instruments” — the smallest grant listed.
The vast majority of the federal funds are tax dollars coming to the state but there are a few that are based on sales of certain items that have a federal excise tax. These include Dingell-Johnson Sport Fish Restoration funds derived from taxes on sales of fishing equipment and boats and fuel. Georgia receives $7 million yearly through federal appropriations. Also the Pittman-Robertson Wildlife Restoration Funds are based on taxes on firearms, ammunition and other sporting goods. For Georgia in FY12, this appropriation totals $3.9 million. Both are appropriated by the state to the Department of Natural Resources.
Budget writers have relied more and more on federal funding to support state departments as shrinking state revenues forced down the state funds budget.
So this 31.9 percent of the total funds budget that is made up of federal funds is vital to the operation of the state.
Looking down the list of federal appropriations, it is easy to spot grants and sources that don’t seem critical. But there is no doubt that when federal funds start shrinking, there will be effects on the state’s budget touching all Georgians’ lives.
To look up a list of federal funds sources in Georgia’s budget, go to www.legis.ga.gov.
I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811
