Bad news! Last week, members of the General Assembly and Georgia citizens received more bad news on the already dismal subject of the annual state budget.
State tax collections for January were $262 million below where they were for the same month last year – a 14.3 percent drop-off. As I have been predicting for the last eight months, this brings the state’s overall deficit for the current fiscal year closer to $3 billion, causing an even greater challenge for lawmakers to balance the budget for the remainder of fiscal year 2009 and fiscal year 2010.
As the result of several years of poor fiscal policies at the state level and the current economic recession, extraordinary action has been taken by legislative leaders.
For the first time in my many years in the General Assembly, both the House of Representatives and the Senate had voted to slow down the legislative clock on the current session in order to provide more time to work on the budget. Over the next six weeks, lawmakers will be in session only three days per week, Tuesday through Thursday, leaving Mondays and Fridays for committee meetings, constituent work and fine-tuning the budget proposals.
On March 25, the scheduled 35th legislative day, supposedly with a budget finalized, we will go into recess until the final week of June. That would leave five days to make any amendments to the budget that take into account the impact on Georgia from the federal economic stimulus package. Some estimates report that $5 billion or more in additional federal funding for education, Medicaid, infrastructure and other programs would flow to Georgia from the proposal now being debated in Congress.
While I am glad to see our House and Senate leaders taking this crisis seriously and giving those of us on the Appropriations Committee the maximum amount of time to have all the information we need to repair six years of fiscal irresponsibility, at the same time, I hope we are not simply counting on a one-time bailout from Washington, D.C., to fix all the state’s problems.
The same state leaders who have been publicly criticizing the federal stimulus proposal now appear to be privately begging for it and counting on it like manna from heaven.
But simply going to the mailbox each day in eager anticipation of a giant federal check will, in the long run, cause more problems than it solves.
It would be a devastating mistake for us not to use this extra time to roll up our sleeves and work on curing the systemic problems that got us here in the first place. During economic downturns in previous decades, Georgia was able to survive because of fiscally responsible budget practices that prepared the state for rainy days. But the past six years have seen monumental growth in big-government spending, bonded indebtedness to the tune of $1 billion per year and a near-total disregard for the average taxpayer with continued shifts of the tax burden to the local level.
This is not how you repair an economy. Like other states in a crisis mode at this time, we need to resist the temptations of unnecessary spending, unnecessary programs and more tax increases disguised as “fees.” Hopefully there will be an outpouring of calls for a restoration of sanity to the state budget process.
We could use this extra time to “start from scratch” in the appropriations process with zero-based budgeting. By carefully examining the AOB (Annual Operating Budget) Documents, members of the Appropriations Committee would have a better opportunity to scrutinize where every penny of the state’s money has gone – to state programs and privatized contracts.
We could end the smoke-and-mirrors and shell-game approach once and for all and produce a state budget that is based on common sense and fiscal responsibilities, delivers the core services of state government and respects the Georgia taxpayer.
We could preserve the state’s economic future and ability to withstand future rainy days without waiting on Washington’s version of Santa Claus.
In action taken last week, the House of Representatives voted unanimously to approve legislation that would make it easier for the state to keep HOPE Scholarship funds available for students’ book purchases and related fees.
Current state law requires that any time the total collection of state lottery revenues declines during a calendar year, the use of HOPE funds for books and fees is reduced by a set percentage.
HB 157 would modify the law to require that lottery revenues decline by eight percent before engaging the “trigger” to reduce grants to students for books and fees. The lottery reserves currently stand at $960 million, which is high enough to justify this change and prevent deserving students from receiving their full HOPE benefits.
The legislation now goes to the Senate for its consideration.
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 firstname.lastname@example.org. For more information, visitwww.alanpowell.net.