Day 33 - March 19, 2008

Fiscal issues took center stage today for children’s advocates.  Senate and House conferees reached an agreement on the 2008 amended budget last night, and the House will take up the conference committee’s report when it convenes tomorrow at 1:30 pm.  In addition, the House will vote on the FY09 budget which was presented to the Appropriations Committee today.
 
The FY 08 supplemental budget includes school construction funding as well as 2.7 million for public defenders.  Some FY 09 budget highlights include a 2.5% raise for teachers and state employees, a 1% rate increase for pre-k providers, math coaches,  restoration of $90 million of education austerity cuts, and expansion of Medicaid coverage for foster youth until they reach age 21.  Among the cuts the legislature made to address the adjusted revenue estimate was a cut of the funding for the Governor’s VIP program to encourage parent involvement and a decision not to purchase new school buses.  Funding for a regional assessment center for victims of child prostitution was not included in the budget. Neither the FY 08 amended budget nor the FY 09 budget includes additional money for childcare subsidies; instead;   the 29.7 million TANF transfer made last year was rescinded. 
 
The Senate Finance committee met this afternoon and passed Senate substitutes of HR 1246 and HB. The Senate version of HB 1244 contains an income tax cut that would result in a $1.2 billion hole in the state budget in FY 2013.  The TABOR-like cap on state revenue growth contained in HR 1246 (previously contained in SR 20) would ensure that revenues would be unable to grow to both pay for the tax cut and meet the education and healthcare needs of Georgians.  The Senate version of HR 1246 would cap property taxes while allowing the car tax to continue.
 
According to information from the Georgia Budget and Policy Institute, if one assumes  
a 6 percent cap in the growth of the state budget each year, $1.2 billion in 2013 is equivalent to:

• 100 percent of the PeachCare budget and 47 percent of the Medicaid budget; or
• 12 percent of K-12 education; or
• 42 percent of the Board of Regents budget; or
• 82 percent of the Department of Corrections budget.

Considering that revenues have already begun to slow as we enter into a recession, the budget impact will be even greater.  A cap on state revenue growth will not allow Georgia to take advantage of increased revenues derived from a future economic recovery, making it very difficult to raise the funds necessary to pay for the tax cut without devastating vital government services.  In that 75 percent of the state budget pays for education, healthcare, and criminal justice, it would be impossible to balance the state budget without some combination of deep cuts to those services.