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Population growth complicated the recovery
Hill Jack
Sen. Jack Hill

Georgia’s relentless population growth throughout the recession made funding state services more difficult in the face of drastically falling revenues. Even during the recovery period since 2012, Georgia has continued to grow near 100,000 in population per year. 

In 2012, the state actually moved up the ranking from ninth to the eighth-most populous state. From 2008-13, Georgia’s population grew over 300,000.

During the recession from 2008 to 2012, growth in population, and thus virtually every formula-funded program, grew, such as K-12 education, college enrollment and Medicaid. So formula funding areas grew and required new funding even when the state was cutting budgets due to revenues falling some $3.5 billion.

In effect, after taking into account the federal stimulus funding, or ARRA, Georgia, because it funds each new student first before funding the balance for education, basically grew education funding even when state revenues were declining. 

But fast-growing systems received new appropriations based on new students added as flat-growth or declining-enrollment systems were losing actual current funding. A fast-growing system in the 4th District had state funding stay relatively flat during the recession because they were receiving growth funding. Of course, they had to pay for new students with what revenues they had coming in, but the net they received from the state stayed relatively level.

State appropriations for K-12 funding were: 2008-$7.97 billion, 2009-$7.50 billion, 2010-$6.60 billion, 2011-$7.06 billion, 2012-$7.07 billion, 2013-$7.37 billion, 2014-$7.54 billion and 2015-$7.94 billion.  In 2009, 2010 and 2011, the state received federal ARRA funds.

So, like state revenue levels that have returned to pre-recession levels, so has spending for K-12, but with some 73,000 new full-time equivalent students who are now in school systems around the state.    

Growth in state colleges up over six years

While growth in enrollment of full-time equivalent students has leveled off or declined slightly over the past two years for Regents schools, the overall trend since 2008 is up substantially. Enrollment for 2008 showed some 235,186 FTEs and grew to 274,449 FTEs in 2014.  This is an increase of 39,263 or 16.69 percent.

This, of course, has caused requests for funding increases for Regents growth, and in only one year was growth not appropriated. Even with all of the pressures from falling revenues and the state having to increase funding for Medicaid and new students in K-12, the percentage of the state budget allocated to higher education has decreased only 1 percent from 2008-14. 
State funds in 2008 for USG totaled $1.827 billion with total revenues of $4.537 billion. State funds allocated to the teaching formula for Board of Regents institutions for FY15 totaled $1.729 billion, and when combined with other funds such as tuition totaled $5.973 billion.
Technical colleges, while having suffered some declines in enrollment the past three years, have actually gained enrollment when looked at from 2008 through 2014, from 73,897 FTEs to 77,508, an increase of 3,611 or 4.88 percent. Funding in the 2008 amended budget totaled $330.8 million in state funds, and $455.8 million in total funds. Funding for FY15 for technical education totaled $296.2 million in state funds and total funds including tuition of $661.7 million.

Medicaid/PeachCare growth changes shape of state budget
The growth since 2008 in enrollees in Medicaid/PeachCare is a large number — three-fourths of the entire population growth for the same period. In 2008, Medicaid enrollment totaled 1.5 million Georgians, but grew through the recession and after, to total 1.8 million enrollees in 2014. This is an increase of 243,870.  The Senate Budget and Evaluation Office combined Medicaid and PeachCare numbers for tracking purposes because the Affordable Care Act moved many children from PeachCare to Medicaid.

Medicaid and PeachCare funding has grown as a percentage of total state spending from 12 percent of the budget in the 2008 amended to 15 percent of the FY15 budget. The state contribution in 2015 to both of these programs totals $3.21 billion dollars.  In 2008, state funds for Medicaid/PeachCare totaled $2.526 billion.

While spending has gone up because of requirements of the ACA, the increase in costs has nothing to do with potential Medicaid expansion, but rather from existing programs.

Incidentally, at $3.2 billion, Medicaid spending in state dollars yearly totals about $321 for every man, woman and child in the state based on 2014 population numbers.

Last week, we noted how population growth could be keeping up unemployment numbers, but I do believe that population growth is a good thing. 

A state that is growing, even if it brings  new costs for school children and other programs, is still preferable to low or no growth. A state that is growing can find solutions because of expanding demand and construction for growth. A state like some of the rust-belt states has problems that are much harder to solve, in my opinion.    

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