Become A Georgia Budget Expert: Changes Over Last Decade

In today’s installment of the Become A Georgia Budget Expert series from PolicyBEST, we’re taking a direct look at how Georgia’s budget has changed over the last decade. Our state budget hit a peak in 2008 and then tax revenues tumbled during the great recession. We emptied the rainy day fund and got a big boost from Washington’s stimulus program. Despite that total of almost $4 Billion in total cushion, Georgia still ended up making some pretty steep cuts.

As the economy began to recover, Georgia began to restore many of those cuts. The spending has been increasing since 2010 and the proposed budget for FY 2017 is larger than the budget from our 2008 peak. Or is it?

In this video, you’ll see:

1) While the budget was cut to a decade low of $17.4 Billion in 2010, our spending was not cut as drastically as that would appear. This is because federal stimulus money that is included in the “big budget” (total of state tax revenues and federal dollars) softened cuts that would otherwise have been made to reflect a state budget that small.

2) Much of the growth in the budget post stimulus spending has been replacing funds cut from the Department of Education.

3) Georgia has added 864,000 people (about 9% of our current population) in the last decade. Thus, the spending per Georgian in real dollar terms will only pass the 2008 peak for the first time if the proposed 2017 budget is adopted.

4) When this figure is then adjusted for inflation over this period of time, Georgia’s proposed budget is 8% less per person than it was in 2008.

There are those within the Capitol and the GA activist class that routinely say “We were just spending $17 Billion a couple of years ago and now we’re spending $23 Billion. That’s proof we’re just spending like crazy again.” Well, it’s not. It’s been ten years, not a couple. We never got our spending down to $17 Billion because of additional federal dollars and spending $1.5 Billion of the rainy day fund. Our cuts came after that money was gone. And perhaps more importantly, these people ignore the growth of the state and inflation when they look at the change over the decade.

For a true measure of what the state spends, we’ll compare us to our neighboring states in Video 6. This reveals the big picture of how Georgia’s spending compares to similar states in major categories, and on a per capita total basis. The results will likely surprise more than a few people.

About the Become A Budget Expert series:

In the state of Georgia, every one of these issues comes back to the budget. We have to have a balanced budget every year. We have critical needs in Education, Health Care, and Transportation. And we have to accomplish all of our goals in these areas and more while having a tax burden that keeps Georgia an attractive place to live, work, and operate a business. Thus, Georgia’s budget is at the crux of virtually every major policy decision.

As such, our PolicyBEST Policy Analyst Zack Lindsey has prepared a series of six short videos that break down our budget process, as well as show where the funds come from and where they are spent. We’ll show the difference between revenue growth and surplus funds, how Georgia’s budget has changed over the last decade, and finally do a comparison of Georgia’s budget and tax burden to that of our neighboring states.

The goal of these videos is too provide raw numbers and facts, as a resource for you to expand your knowledge on Georgia’s budget.

Video 1: The Budget Process.
Video 2: Where Do Georgia’s Budget Funds Come From?
Video 3: Where Does Georgia Spend Its Tax Dollars?
Video 4: How Big is Georgia’s “real” surplus?

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