Georgia Budget & Policy Institute
This Week in the Georgia Legislature
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House and Senate Calendar   
The House and Senate have finished 20 legislative days. They have adjourned until Monday, March 8th. 
The Ever Increasing Budget Shortfall
 
Due to the continued decline in state revenues, and the uncertainty of the General Assembly approving the Governor's proposed revenue increase, the FY 2011 budget could be facing an additional $1 billion shortfall.
 
State revenues through January (first seven months of FY 2010) are running 12.9 percent behind FY 2009 revenue collections.  The Governor's FY 2010 revenue estimate is based on a decline of 7.3%.  Revenues will need to increase by 4.3 percent from 2009 levels over the remaining five months of this fiscal year in order to meet this estimate.  The Georgia State University Economic Forecasting Center February Forecast projects an FY 2010 revenue decline of 8.5%.  This would result in an FY 2010 shortfall of approximately $210 million. The most likely scenerio for making up this shortfall is to transfer $200 million to $300 million in Federal stimulus funds budgeted in FY 2011 into the FY 2010 budget.   
 
Without adding in his new revenue proposals, the governor's FY 2011 revenue estimate projects a 3.9 percent revenue increase over projected FY 2010 revenues.  The Georgia State University Economic Forecasting Center February Forecast projects an FY 2011 revenue increase of 3.5%.  Combined with the Georgia State University FY 2010 revenue forecast, this would result in an FY 2011 shortfall of approximately $230 million. 
 
Potential FY 2011 Shortfall ($1 billion)
 
  • Revised FY 2011 revenue estimate to account for continued revenue decline ($200 million to $300 million).
  • Transfer of Federal stimulus funds budgeted in FY 2011 to FY 2010 in order to cover the FY 2010 shortfall ($200 million to $300 million)
  • General Assembly reluctance to approve Governor's proposed Hospital/CMO tax ($275 million).
  • General Assembly reluctance to approve securitization of certain Georgia Environmental Facilities Authority loans ($287 million).
 
State Budget: FY 2010 Amended and FY 2011  
 
FY 2010 Amended Budget
 
The House passed their version of the Amended FY 2010 budget (HB 947) on February 11th, while the Senate passed their version on February 18th. The House and Senate versions of the budget have mostly minor differences. 
 
The House and Senate are waiting for the February revenues numbers to be released (1st week of March) to finalize the Conference Committee agreement.
 
FY 2011 Budget
 
With the FY 2011 budget facing a potential $1 billion additional budget shortfall, the House and Senate appropriations committees held joint budget hearings this week to hear from state agencies, and in some cases the public. Hearings will continue throughout next week. 
 
The General Assembly is deciding whether to balance the state budget shortfall based on 100 percent budget cuts or a more balanced approach of some combination of budget cuts and revenue increases (i.e. increase the cigarette tax).
 
Nearly 85 percent of the state budget is spent on education, healthcare, public safety, and human services.  Therefore, these agencies will most likely face significant additional budget cuts.  Fewer new revenues will result in greater cuts to these priority state service areas. 
 
GBPI Analysis
 
Please see the newest GBPI fact sheets and reports:
 
 
 
 
 
Please see the following reports for analysis of the governor's budget proposals:
 
 
February 26, 2010
 
Alan's Signature
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"The choices [states] make about how to close those deficits have serious implications...States that rely primarily on widespread budget cuts are harming residents and businesses that need immediate assistance; they also are reducing demand in the economy and impeding their state's economic recovery...."
 
Read the full report by Iris Lav of the Center on Budget and Policy Priorities
For more info and reports, please visit:
 
GBPI in the News
 
 Alternatives to Budget Cuts
 
 
Georgia, Oregon Become Economic Test Case  Atlanta Journal Constitution
  
 
Stimulus Package Puts Nearly $10 million in Floyd Pockets 
Rome News-Tribune
 
 
 Georgia Faces $4.6 Billion Deficit
 NorthFulton.com
 
 
Georgia Should Raise its Taxes to Close the Budget Shortfall and Modernize the State  
 
 
The General Assembly and the State's Budget
 
Session 2010 Info:
 
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The Georgia Budget and Policy Institute, the state's leading independent, nonprofit, non-partisan organization, seeks to build a more prosperous Georgia. We rigorously analyze budget and tax policies and provide education to inspire informed debate and responsible decision-making, advancing our vision of a state in which economic opportunity and well-being are widely shared among all.