Gov. Deal budget plan reflects return to pre-recession spending levels

Gov. Deal budget plan reflects return to pre-recession spending levels

By Louis Mayeux –

Gov. Nathan Deal begins his second term with a state budget closer to those of Georgia’s boom years before the recession slashed state revenues to the bare bone.

Deal on Friday offered a proposed $21.78 billion spending plan for FY 2016, which begins July 1, an increase of about $900 million over this year’s budget. The state budget had reached $21 billion before economic bad times sunk state spending to around $18 billion.

But while revenues continue to increase, so has the state’s population, which means that the state’s spending doesn’t go as far as it did before the recession.

“It’s taken us a long time to recover,” said University of Georgia political science professor Dr. Charles Bullock III. “We’re getting back to where we were, and we haven’t begun to be fully able to meet expectations.”

After years of austerity cuts of as much as $1 billion a year to the state’s schools, Deal boosts Quality Basic Education funding by $280 million, a significant step toward fulling funding the QBE formula for the first time since 2003. He also plans to give state employees and teachers pay raises worth $27.7 million, a modest amount after years of no increases. “The teachers have suffered in the recession,” Bullock said.

Although the spending plan doesn’t yet match the generous days of the past, the budget plan reflects the governor’s optimistic theme in last week’s state of the state speech that the economic recovery will keep rising.

“More money is out there,” Bullock said. “Like any politician, he likes to be in a position of distributing extra spending rather than telling people no, no, no.”

The budget lists $800 million in bonds for a variety of projects, including $23 million for the Georgia World Congress Center Authority to provide parking for the Atlanta Falcons’ new stadium.

The University System of Georgia’s $198 billion in bonds for capital projects allocates $60 million for facility improvements and renovations system wide and $3.3 million to equip a new science learning center at the University of Georgia. Local school districts will receive $230 million from bonds for capital projects.

College students also received good news. The plan offers a 3 percent increase in HOPE scholarships and grants, based on an expected $16.7 million rise in lottery funds. Lottery shortfalls led to HOPE program reductions in Deal’s first term. A total of $6 million in additional lottery funds will go toward expanding the low-interest loan program for students.

The budget is based on estimated future revenues, and painful cuts are required if collections fall short of expectations. Each year, the budget is adjusted to take account of actual revenues. Deal in his state of the state address spoke proudly of his conservative budgeting principles that resulted in revenues exceeding expectations. His policy has been to place the amount above expectations into he state’s “rainy day fund,” increasing it by 643 percent.

If next year’s revenues again exceed expectations, perhaps the recovery will be far enough along so that the additional money can be spent on new projects, rather than set aside for emergencies.