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This Week in the Georgia Legislature |
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State Revenues
State revenues for the first six months of this fiscal year are running 8.1 percent ($588 million) ahead of the FY 2010 revenue collections. More than $127 million of the growth is accounted for by a decrease in the number of refunds distributed. Discounting fewer refunds distributed, actual revenue growth is 4.5 percent.
The governor's FY 2011 revenue estimate projects an increase in revenues of 4 percent ($610 million). It seems highly likely that the fiscal year will end in a surplus of several hundred million dollars, which the governor has stated will be used to begin rebuilding the Revenue Shortfall Reserve.
According to the governor, his FY 2012 revenue estimate is a modest 3.75 percent. The governor included in his FY 2011 base $288 million in one time revenues from the GEFA monetization. Not taking into account the one time revenues from the GEFA monetization and comparing growth in taxes and fees, the revenue estimate actually projects a more substantial increase of 5.8 percent compared to FY 2011 projected collections. However, to drive a surplus of $300 to $400 million in FY 2012 to continue rebuilding the Revenue Shortfall Reserve, revenues would need to grow between 7 and 8 percent.
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| House and Senate Calendar
The House and Senate are scheduled to go into session for the third legislative day on Monday, January 24. |
| State Budget: FY 2011 Amended and FY 2012
Process
Governor Deal released his proposed budgets on January 12, 2011. The House and Senate will be holding joint Appropriations Committee Hearings to hear from the governor and agency heads January 18th through 20th. (Download the proposed budgets.) GBPI Analysis
The governor's FY 2012 budget proposal is disappointing in that it does not take a balanced approach to solving the state deficit. The budget contains additional cuts to education, with significant cuts to higher education, as well as cuts in services to our most vulnerable populations. A balanced approach to the fiscal crisis that includes additional revenues would assure that the factors most important to economic growth in the state, such as higher education, receive the necessary resources for Georgia to prosper.
GBPI analysis of the FY 2011 Amended and FY 2012 budgets will be released on January 20. |
| Fiscal and Tax Policy
Tax Council Recommendations Would Be Improved with a Robust Low-Income Tax Credit
The Special Council on Tax Reform and Fairness for Georgians released their recommendations on January 7. The recommendations include some much needed changes that will help our tax system better reflect today's economy, such as the move to expand the sales tax to services. Although many of the recommendations mirror GBPI's own recommendations for tax reform, there are also some concerning elements, such as the imposition of state sales tax on groceries and the resulting shift of taxes onto those least able to afford it.
GBPI will release an analysis of the Council's recommendations next week examining the distribution of tax changes and the potential improvement of that distribution if legislators improve the tax credit for low-income Georgians. The analysis also will examine the impact on state services in the short- and long-term.
GBPI will also host a panel discussion at its policy conference on January 21 featuring Majority Leader Larry O'Neal, Minority Leader Stacey Abrams, and Tax Council member Dr. David Sjoquist.
Download GBPI's initial response to the Council's recommendations: press statement, commentary on the income tax, and commentary on tax reform moving forward.
First Tax Expenditure Report Released
The budget included a new feature this year that brings more transparency to spending made through the tax code. Georgia has more than 100 tax exemptions and credits; however, prior to this budget, the state did not have an annual accounting of the cost of these programs. Senate Bill 206 passed last year and requires that the governor's budget sheds light on tax code spending through an annual tax expenditure report. Legislators will have an opportunity to see where the tax code spending happens and debate whether those dollars would be better spent in direct spending on services or in lower tax rates for the rest of taxpayers. Georgia is one of the last states to adopt a tax expenditure report requirement. According to an upcoming report by the Center on Budget and Policy Priorities, several states lead the way in comprehensive tax reports. Connecticut, D.C., Oregon, Texas, and Washington rank highest in tax expenditure reporting based on scope, accessibility, detail, and evaluation. State leaders will now need to explore what additional reporting and evaluation should occur so that tax breaks aren't just transparent but also accountable to Georgians. |
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2011 Policy Conference
January 21, 2011
"The Fiscal Crisis: Where do we go from here?"
Join GBPI for its annual policy conference on January 21 from 8 a.m. to 4 p.m. at the Loudermilk Center. Receive the latest information from national and state experts in regards to state tax reform, implementation of the new health care law, and the federal budget. |
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Stay connected.
Read GBPI commentary for the most up-to-date information this legislative session.
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