Comments on Fiscal Year 2012 budget
March 15, 2011
Here is information for context on the Fiscal Year 2012 budget, which the House voted on last Friday. The budget will continue to undergo medication before it is finalized. The state Senate will make changes and then a six-member conference committee will reconcile the differences.
I will serve as one of the three House members on the conference committee.
In our leadership role, the Republican majority will fulfill its budgetary obligations to the state, and we’ll do it with Georgians’ best interests at the forefront.
Chairman Terry England and the Appropriations subcommittee chairs have done an outstanding job in managing the most challenging budget since the Great Depression.
General Funds as distinct from Dedicated Funds
· General funds are allocated among 40 agencies and the three branches of state government. Dedicated Funds can be appropriated only for designated purposes.
· General funds account for 87 percent of the budget; the remainder is restricted.
· Dedicated Funds are comprised of Motor Fuel taxes; Tobacco Settlement; Lottery for Education; and Brain and Spinal Injury Trust Fund. Nursing Home Provider Fees and the Hospital Provider Payment is dedicated in practice for Medicaid drawdown.
General Fund Composition
· The Department of Education accounts for 44%. Of this portion, more than 90% is distributed to systems and schools through the per-student QBE formula, Equalization formula and a small amount for three state schools for the deaf and blind. The bulk pays for salaries at the school-level.
Snapshot of FY 2012 Budget compared to FY 2011 Budget
· General tax revenues are derived from state taxes only.
· General tax revenues are slightly higher than last year by 2%. On a per capita, inflation adjusted basis, General tax revenues are one percent less.
· On a per capita, inflation adjusted basis, the FY 2012 Budget is more than 20% percent less than when Governor Perdue took office in 2003.
· Total revenues include state tax collections, dedicated tax collections and federal funds.
· Total funds allocated to state agencies from all sources are $1.6 billion lower, primarily due to reductions in federal funds and lower projected lottery receipts.
1. The $1 billion in American Recovery and Reinvestment Act (ARRA) stimulus funds Georgia received for each of the past two years have ended.
2. ARRA funds were distributed to several agencies including Community Health, Behavioral Health, Medicaid and Public Safety.
· Most agency budgets will be reduced an average of 8% from last year; K-12 Education was largely protected.
· Several significant appropriations to the FY 2012 budget were driven by population growth, a court agreement or maintenance of the state’s AAA bond rating:
– $90 million – increase in K-12 per student funding to school systems with increased enrollment.
– $54 million – additional funding required by agreement with the Justice Department to assure adequate mental health funding and support of state mental health hospital.
– $35 million – additional funding for three separate state retirement systems to meet actuarially required contributions and maintain state’s AAA bond rating.