After a week of further review and three days of Appropriations Committee hearings, it seems the governor’s state budget proposal contains more than meets the eye. In addition to easily visible reductions in state services, tax increases, additional borrowing and spending and raiding of the state reserve fund, there is also considerable smoke and more than one mirror.
The proposal would cut an additional $461.1 million from Quality Basic Education (QBE) funding for local schools ($185.8 million this year, including $50 million the legislature restored in the original budget, and $275.3 million next year), bringing the eight-year total shift of the state’s obligation to local property owners to more than $2 billion.
If that’s not enough, a closer analysis of the budget proposal by the Georgia School Boards Association revealed “an interesting accounting maneuver” by the administration, which redirects another $74.4 million in funding for graduation coaches, classroom gift cards and Regional Education Service Agency (RESA) operations to the QBE programming. This means even less state funding to local schools for student instruction, a shell-game approach to delivering unfunded mandates to the local level.
Public school teachers will go without a salary increase in the governor’s new budget (along with all state employees), and they will have to pay more for their health insurance coverage. The governor’s plan also eliminates state funding for school nurses and a pay hike for teachers who earn National Board Certification.
Numerous other cuts bring the total reduction for education to $491 million for FY 2009 and $250 million for FY 2010. The administration refers to these as “austerity cuts,” but as I have said for the past six years, there is nothing austere about shifting a constitutional responsibility from one level of government to another.
The end loser is the local homeowner, who also faces an average tax increase of $300 unless the legislature is able to restore the property tax relief grants to local governments, a program this governor has never supported, to the current budget.
Another of the administration’s most talked-about budget initiatives would implement a new 1.6 percent provider tax on the revenues of hospitals and health insurance plans.
Appropriations Committee members raised serious concerns about a program that taxes the state’s hospitals $260 million and offers only a $52 million return on that investment.
While the plan might benefit some big-city hospitals with trauma services and higher numbers of Medicaid patients, there is great concern over the effect of the new tax on smaller hospitals in rural areas around the state. Many of these facilities are already strapped for cash and on financial life support. This is the worst possible time for them to take another hit. Just last week, BJC Hospital in Commerce announced the layoff of 45 employees because of the economy and “drastic Medicare, Medicaid, charity care and bad debt deficits from the state and federal governments.” The new tax would inevitably be passed on to paying consumers.
There is no doubt about the importance of our state dealing with the health care system’s financial challenges and the need for a reliable, sustainable funding source for trauma care. But whether a new tax on hospitals, insurers and their consumers is the right path to take will be the source of much debate in the coming weeks.
The bottom line is, Georgia’s state government has major problems with its budget, some of which have been brought on by the economic crisis, but most of which are systemic in nature. The process has suffered from a culture of fiscal irresponsibility. Unfortunately, some at the top of our government are unwilling to reverse the tax-borrow-spend-shift philosophy that has gotten us here.
Much work lies ahead in the next 35 legislative days to fix the problem, and there are major factors that have apparently not even been considered. Not the least of these is Georgia’s share of the federal stimulus funding that may be coming out of Washington. Our budget problems need to be resolved this year, or they will continue to grow, year after year.
Before the budget process goes forward in the customary rubber-stamp method, all members of the General Assembly need to roll up our sleeves and get to work. We need to immediately implement zero-based budgeting and give much-needed scrutiny and prioritization to all state programs. We need to end the “blank checks,” the multimillion-dollar privatized contracts. The taxpayers of this state deserve nothing less than our greatest effort to balance the budget on common sense, not smoke and mirrors.
Rep. Alan Powell (D-Hartwell) represents the 29th District (Franklin, Hart and Madison counties) in the Georgia House of Representatives. Contact him at 507 Coverdell Office Building, Atlanta, GA 30334; by phone at 404-656-0202 or by e-mail at email@example.com. For more information, visitwww.alanpowell.net.