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Developing the state budget is a journey of many steps

POSTED: January 26, 2011 4:00 a.m.

Developing the state budget is a lot like making sausage. You have to follow the rules (recipe) carefully. Many steps are required and they have to be done in the proper order.

 

During the first week of the General Assembly’s 2011 Legislative Session, Gov. Nathan Deal delivered his State of the State Address presenting his amended budget for FY 2011 and the FY 2012 budget. The actual budgetary process started last week with a week’s worth of House and Senate Appropriations Committee meetings. This was the beginning of the arduous process of reviewing the governor’s budget recommendations and making them into the actual legislation that will ultimately guide all state spending.

 

Deal led the presentations by detailing the major highlights of his budget proposals. Leaders of our state agencies then explained their budgets and answered questions from house and senate members. 

 

State revenues for FY 2011 are not sufficient to cover the loss of federal stimulus money; therefore, Deal’s Amended Budget has reduced the FY 2011 budget by more than $27.5 million.

 

To accomplish this, most state agencies will cut spending by 4 percent for the remainder of this fiscal year. The savings from these budget cuts will allow us to continue funding Medicaid, hospitals that treat a high number of uninsured individuals, and economic development efforts that bring jobs to Georgia. 

 

Even with these cuts, it was still necessary that 1 percent of the Revenue Shortfall Reserve (known as the “rainy day fund”) be used to continue current funding for K-12 education. He also recommended no reductions for Quality Basic Education (QBE), the Equalization Grant and state school spending.

 

Our best indicators tell us that Georgia’s economic conditions have stabilized and continue to improve; however, state revenues grow at only modest levels. 

 

With this in mind, Deal set the FY 2012 state revenue estimates at a modest 3.75 percent increase over the FY 2011 Amended Budget recommendations. 

 

Even with this slight increase in state revenues, the greatest challenge for the FY 2012 budget will be filling a $1 billion hole left by expiring federal stimulus funds. 

 

To do this and maintain a balanced state budget, we will have to further reduce spending by state agencies at an average of 7 percent for the next fiscal year, which runs from July 1 through June 30, 2012. These agency cuts are not uniform and are designed to prioritize funding to core responsibilities. For example, the governor’s proposal for FY 2012 actually includes a net increase of $30 million in K-12 formula funding.

 

Despite a continued need for additional budget cuts, there is good news about the state of our economy. Latest economic data tells us that not only are more Georgians working now than this time last year; they are also making more money. Wage and salary incomes have grown in each of the last two quarters. Georgians are also spending more — an increase of almost 5 percent for the first six months of this fiscal year.

 

Overall, our economic recovery is strengthening with sturdy manufacturing growth, increasing consumer spending, and labor markets finally adding jobs.

Now that joint appropriations committee meetings have ended, the next few days will be spent reviewing the finer details of the amended FY 2011 and FY 2012 budgets.

 

Those of us who are members of House Appropriations subcommittees will begin to delve even further into the governor’s budget proposals.

 

Once the subcommittees pass their respective portions of the budget, the entire House Appropriations Committee will review and pass balanced budgets for both the remainder of FY 2011 and upcoming FY 2012.

 

After the House Appropriations Committee passes a budget, it will go to the House Rules Committee and be placed on the House calendar. It will then go to the House floor, where every member of the House will have the opportunity to voice an opinion on how the state will spend your taxpayer dollars. We will then vote to approve or reject the state budget.

 

Once a budget passes the House, it will go to the Senate and repeat this same committee process. After making its way through the Senate Appropriations subcommittees, the Senate Appropriations Committee, and the Senate floor vote, the budget will then come back to the House. If there are differences between the House and Senate versions of the budget, the Speaker of the House and lieutenant governor will both appoint a conference committee to work out those differences.

 

The House and Senate will then vote on the conference committee’s version of the budget. This is key because the House and Senate must completely agree on all contents of the legislation before it can be sent to the governor’s desk for consideration. Once signed by Deal, the budget becomes law. Though complicated, all legislation must go through this process before becoming law.

 

 

Rep. Amos Amerson can be reached at 401 Capital Avenue, Atlanta, GA 30334; phone (404) 656-7857; fax (404) 463-2044; e-mail amos.amerson@house.ga.gov. Or contact Gerald Lewy at (706) 344-7788.

 

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