Governor Deal Releases FY2019 Budget Proposal

The State of the State was the show, but the OPB has the plans for the dough. The Office of Planning & Budget has released the Governor’s budget request for FY2019, which begins July 1st. You can see the entire budget here.

The document begins with a three page intro letter from the Governor, which has a nice comparison to the budget the state faced when he took office and the one he prepares to leave as his last. Because education is always the highlight in the press and politically (as well as representing half of all state spending), I’ll highlight his words on the K-12 portion of education here:

“Our greatest resource is our people, and investing in the education of our youth to help them prepare for the jobs of tomorrow is the soundest investment we can make. In 2011, plummeting revenues had meant steep cuts across the budget,including to our K-12 and higher education systems. Our lottery funded programs had become financially unsustainable. Since 2011, we have restored $2.7 billion to our K-12 systems, including $59 million in FY 2019…The FY 2019 budget also includes an additional $361.7 million for the TeachersRetirement System to fully fund the actuarially determined employer contribution to keep our pension system on sound footing and ensure the state can meet its future obligations to those who have dedicated their careers to serving the educational needs of our children.”

A lot will be made of the fact that money for local systems to provide raises to K-12 teachers is not proposed. Please correct anyone reporting that “teachers get nothing” with the fact that their defined pension plan alone required an additional third of a billion dollars this year above normal contribution levels to keep it actuarially sound.

Much of the increase to education spending this year outside of pensions will involve transforming and expanding the Technical College System of Georgia.  It is taking over the role and offices of Workforce Development, and is now squarely at the center of outcome based/results focused career education in Georgia.  The part of the same graph above that was truncated is below with those details:

“The FY 2019 budget also includes $1.8 million to add 226 new scholars to the REACH Georgia Scholarship program and expand the program. It also adds $60 million to our higher education systems and transfers the Governor’s Office of Workforce Development to the Technical College System of Georgia to further enhance the education to workforce pipeline. Our lottery system, which had reserves of $360 million at the end of FY 2010 and which were quickly depleting, today has minimum required reserves of almost $549 million while continuing to keep our promise of providing a quality pre-kindergarten education to 84,000 of Georgia’s 4 year olds and merit-based scholarships and grants to help Georgia’s best and brightest afford a quality higher education.”

Other budget highlights:

Medicaid funding is increased by more than a quarter billion dollars.

HOPE scholarship payouts are increased by 3%, for a cost of $68 Million.

Approximately $45 Million is added for various additional and expanded mental health services.

$7.5 Million in bond funds to construct a pedestrian mall at the GWCC (that big hole in the ground that used to be a Dome).

For the third year, $100M in bond funds are recommended to provide road and bridge repair/replacement per 2015’s HB170 guidance.

Most of the other “bells and whistles” are projects at the University System and DNR funded by bond projects.

The takeaway: While you’ll hear the usual suspects talk about the state “giving away” a billion dollar surplus, a billion dollars of revenue growth on a $25 billion budget is just 4% annual growth. When you consider the cost of inflation and population growth of about 1% per year, there’s not a lot of new money left to maintain existing programs. And what was left over this year after paying for higher school enrollment, higher cost of providing health insurance for state employees and Medicaid, etc, is proposed to shore up the Teachers Retirement System of Georgia and provide some much needed support to long neglected programs in the Department of Behavioral Health.

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