State Needs Likely To Exceed State Funds

This week’s Courier Herald column:

Congratulations and condolences to Senator Blake Tillery.  The Vidalia Republican was tapped last week to chair the powerful Senate Appropriations Committee following the death of Senator Jack Hill of Reidsville. 

Senator Tillery has big shoes to fill at a time when there will be no honeymoon period to enjoy assuming such a powerful post.  An unfinished budget plan to spend $28.1 Billion of state revenues remains from when the Georgia General Assembly suspended activities in mid-March.  When legislators return – presumably prior to the end of June to start the next fiscal year – they will face an uncertain revenue picture and a mountain of new spending requests due to hardships created by the pandemic.

Estimates of revenue shortfalls are just being put together, but cuts are coming. They will likely be substantial.  While many casual observers of capitol politics believe it’s a fun job to dole out tens of billions of dollars annually, members of the legislature’s appropriations committees will spend much more time saying “no” over the next year than they will be able to say yes.

Chairman Tillery’s counterpart understands the magnitude of the job, as well as the timing of this battlefield promotion.  Chairman Terry England took the reins of House Appropriations in 2011.  The housing bust was already years old, but state revenues had continued to lag due to the fallout in the state’s banking, real estate, and airline sectors. 

Teachers and state employees were facing furloughs. Cities and Counties were watching property taxes fall with real estate values.  Demands were great, but the reserves were empty.

Today, Georgia enters the crisis with more than $2.5 billion in the state’s rainy day fund. That’s due to England, Hill, Governor Deal and the staff of each saying “no” a lot and “yes” sparingly as the economy recovered. 

I interviewed Chairman England in 2013 when budget revenues were beginning to grow but it was far from clear that Georgia’s economy was on stable footing.  T-SPLOST had just failed in most parts of the state, and I wanted to understand why the state was still collecting the “fourth penny” of sales taxes on motor fuel for the general fund instead of sending the money to GDOT. 

The state was projected to have a $300 million surplus that year, and it seemed everyone knew the state’s transportation infrastructure was in need of real money.  That “fourth penny” was worth about $180 Million annually.

He gladly made the time, and we spent almost all of it talking about… Medicaid. He provided facts and figures about how the Affordable Care Act mandated everyone to have insurance, and the result was that Georgia saw a 50% increase Medicaid enrollment – at an annual cost of $1 Billion.  He suggested a few people I might want to go interview about that, as it was a good, underreported story.

We never got around to talking about that fourth penny, but I got another chance.  We talked about mid-year enrollment in Georgia’s K-12 public schools, and how QBE sets an amount paid for each child enrolled. Georgia was growing fast again, and that if that money wasn’t given to counties for each newly enrolled child, that would be viewed as a cut.  It was hundreds of millions of dollars.  Again, he suggested some folks I might want to talk to about education funding, but we never got around to talking about that transportation penny.

Our next conversation was about state employees’ and teachers’ retirement systems, and how the state had to put extra money in lost in the crash to make the plans actuarially sound.  There was a conversation about increasing healthcare costs for state employees, and many others.  Each problem was in the hundreds of millions, if not billions. 

Near the end of that session, we still hadn’t talked about the transportation budget, but the Chairman came into the Senate chamber and stood beside me in the back of the room as he waited for a bill to be presented.  I leaned down to him and said I understood his riddle.

“Riddle?” He looked at me a bit confused.

I told him I had been asking him for weeks about a penny of sales taxes on gasoline, and we had talked about anything but that, but I got his message.  He asked me what that message was.

“Well, it appears you have about $5 billion worth of problems, and $300 million to solve them any way you want.”

He laughed, not because it was funny, but because I understood. 

The needs that are brought to the legislature are great, and many of them have merit.  The state also has a constitutional obligation to balance a budget – in good times, and in bad times.

Senator Tillery will now join Representative England, Governor Kemp, and their respective staffs to sharpen their pencils balance a budget.  We don’t need to like it – and we probably won’t.

The needs will be greater than the dollars available.  That is what we as citizens must understand.