Reading the spin on current events in Georgia, a casual reader might be misled by the tone and negativity of some writers who on closer examination, have an agenda. This information is not to diminish the right of everyone to have an opinion. (Everyone is entitled to their opinion no matter how misinformed!)
Some would have the citizenry of Georgia believe the state is teetering on shaky ground and is barely out of third world range. And listening to the nay sayers who criticize public education, investments in children's welfare, infrastructure priorities and just about every other public policy area, you might believe the leaders of Georgia are asleep behind the wheel and that we are headed straight downhill.
While some states are fighting over raising taxes and stagnant growth, Georgia leaders fought over tax rebates and rebuilding reserves. Georgia grew faster than virtually any other state our size last year, maybe as many as 211,000 people just last year. Now why would this many people move to Georgia if this is not considered the place to get a job? There have been estimates of over 50,000 of the Katrina evacuees who chose to stay in Georgia because of the opportunities here.
One of the old rural sayings is “you don’t know how you look till you have your picture took.” Georgia’s image is probably closer to how it appears to the New York bond underwriters than how we view ourselves whether we’re the Chamber or the opposing party. Those “steely eyed” underwriters look at every state critically and that assessment has more validity than many others....it is certainly a fair assessment because the underwriters have to back up their evaluations with a bond rating which determines what states pay in interest for the funds they borrow to build infrastructure.
The fact that Georgia has maintained a “AAA” rating since the mid nineties is a testament to the management by both parties of state government over the years. But some states have lost their rating over the past few years and presently only seven states have this highest rating which insures a bottom range interest rate when Georgia’s bonds are sold.
So what do we point to when we “sell our state” to the underwriters? The presentation the state made to the three underwriting firms recently gives a very good assessment of where our state stands and how well the management is running things.
Here are some the positive facts that helped Georgia maintain its’ “AAA” rating
1. Georgia’s revenue shortfall reserve stands at $1.196 billion as of June 30, up from $50 million four years ago.
2. Tax collections were 7.6 percent ahead of last year’s tax receipts.
3. Georgia’s leadership has shown that they will take measures to balance the budget during lean times even to the extent of cutting existing budgets.
4. By statute, the first 4 percent of surplus funds must go into the revenue shortfall reserve.
5. Georgia never gets caught by unforeseen school enrollment growth as the first 1 percent of surplus funds goes to fund the enrollment growth in k-12 schools.
6. There is no history of voter initiatives placing mandatory spending or fiscal restraints on the operation of state government nor are there any constitutional minimum spending mandates or limitations on overall revenue collections.
7. Georgia publishes and follows a 5-year debt management plan and has stuck to that plan.
8. Individual income taxes, 50 percent of the states’ revenues, rose 9.7 percent last year.
9. Sales taxes which account for about one-third of state revenues grew by 4.2 percent in 2007.
10. Corporate income taxes grew by 17.9 percent last year, the third straight year of over 10 percent growth. What does this say about the prosperity of business in Georgia?
11. Georgia has put aside $188 million for school enrollment growth separate from the $1.2 billion reserve.
12. Georgia’s job growth is above U.S. employment growth even though it has moderated in the past year.
13. Georgia is 12th nationally in personal income growth although under the U.S. growth rate.
14. Initial and continuing unemployment claims continue to be moderate.
15. Although job growth is at 1.7 percent growth, four of the 10 categories are over 2.5 percent.
16. In the face of the General Motors plant closing, new projects creating jobs continued to be strong including Kia, Gulfstream, AFLAC and the Georgia Ports.
17. 281 companies announced $2.783 billion in new investment and 17,385 new jobs last fiscal year.
18. Georgia is putting aside funds ($147 million) to start funding the health insurance costs of state retirees.
19. Georgia will spend a little over $1 billion on capital outlay projects with almost 50 percent of that figure going to build new k-12 schools.
20. Georgia’s debt is about about 6.12 percent of last year’s revenues, right on target with the debt management plan.
21. Georgia’s employee and teachers retirement plans are 95 percent or higher funded and the state has consistently made 100 percent of the annual required contributions to the funds.
So that is the “Top 20” reasons why Georgia continues to be ranked in the top states in the country in terms of soundness and management and maintains the highest bond rating. Challenges? Sure, but plenty of states would gladly swap their economic status with ours.
Visit the Legislature’s home page at www.legis.state.ga.us
To view the FY2008 Budget in its entirety: www.senate.ga.gov - Tab - Budget Reports
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E-mail at Jack.Hill@senate.ga.gov
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