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Public Statements

Governor's Joint Appropriations Hearing Address

Hearing

By:
Date:
Location: Unknown

Chairman England and Chairman Hill, ladies and gentlemen of the Appropriations Committees, good afternoon. I am pleased to be here with you, and appreciate the opportunity to present to you my budget recommendations for the current and next fiscal years. I believe the budget before you makes sound investments in our state, our communities, our infrastructure, and our people that will build a strong foundation for Georgia's prosperity for years to come.

As you all know so well, over the last several years we have had to make difficult choices in our budget, but together we have managed to not only maintain a balanced budget, but also to rebuild our Rainy Day Fund. We have done so without raising taxes on Georgians, in fact we have reduced them.

When I took office, our Rainy Day Fund had been depleted to $116 million. Now, as a result of our conservative fiscal management, the Rainy Day fund is more than six times the size it was then. As of the end of Fiscal Year 2013, the Rainy Day fund totals more than $717 million.

I will caution you, however, that we must make rebuilding this reserve a priority in each and every budget so that we are prepared should Georgia ever again face a sudden downturn as we experienced in 2008. A robust rainy day fund is an important tool in maintaining our AAA credit rating, which not only saves us taxpayer dollars in interest on our debt, but also sends an important message to the business community that Georgia is a reliable and economically strong state in which to invest. We will remain conservative in our revenue estimates to ensure that we continue to add to our RSR balance at the end of each year.

Before we walk through the details of the budget you have before you, I think it's important to put where our budget is today in a historical context and discuss the limitations we face in determining how we appropriate each and every taxpayer dollar.

[SLIDE 2] The chart you see shows state appropriations over the last ten years. You can see that we have made steady year over year gains since the low-point of the Great Recession, but when you adjust for inflation, as the dashed line shows, the FY 2015 budget is only about three percent higher than the budget in FY 2005. It is three percent lower than FY 2007 spending levels.

[SLIDE 3] When you put these numbers in context of our growing state population, you'll see that the proposed spending per capita in the FY 2015 is 10 percent below what it was 10 years ago.

[SLIDE 4] Looking back over the last 25 years, current per capita spending is less today than it was in 16 of the last 25 years, and is on par with what we were spending in 1990.

So while revenues are expected to be up in FY 2015, as you can see, when we look at real spending per Georgian, we have significantly reduced the size of state government. We are doing more with less and using every taxpayer dollar as efficiently as possible.

[SLIDE 5] You see this trend in our state employees as well. Over the last five years, as a result of budget cuts, we have reduced the number of state employees by 12,750, a 16.5% decline. Our current workforce is serving a greater number of Georgians with fewer people, and I'd like to take a moment to thank them for their hard work and dedication in serving the citizens of this state.

[SLIDE 6] Over the last seven years, our agencies that are designated as Healthy Georgia agencies have taken up an increasing proportion of the overall budget, growing from 19.8% of the state budget to now more than 23%. Much of our revenue growth since the downturn has had to be directed towards meeting growth needs in Medicaid and PeachCare. Even without expanding Medicaid, in the AFY 2014 and FY 2015 budgets, these programs will require an additional $122 million to meet our anticipated expenditure growth and the cost of the Affordable Care Act. Our state health benefit plan expenses, while spread throughout the budget, are also increasing as a result of the Affordable Care Act. Between Medicaid and SHBP, the state will spend a total of $327 million to implement the Affordable Care Act in FY 2015 alone. When you factor in other non-discretionary spending areas like funding for enrollment growth in our K-12 and higher education systems, debt service on our capital spending, and for managing our prison populations, you can see that our other policy areas have had to find efficiencies and make reductions over the last few years.

[TITLE SLIDE] Since 2009, the FY 2015 budget marks the first opportunity the state has had to not just fund the most basic needs in our budget but to also make strategic investments in our state's long term economic health.

It has been a primary goal of my administration to ensure that Georgia is seen as a global destination for business. Site Selection magazine has named Georgia as the number one state for business, and our job creation performance supports that designation. 2013 was a record year for job creation in this state. The work we do is critical in promoting a pro-business climate that will continue to attract industry and investment to Georgia.

One of the most important resources we must have to attract global investment is a world-class workforce capable of meeting the needs of a rapidly changing global economy. We must invest in our citizens first and foremost to ensure that each and every one of them is equipped with the skills they will need for success in the workplace. This begins with providing every student a solid educational foundation and instilling in them a culture of learning that will continue beyond the school house doors. Therefore, in addition to funding the midterm adjustment in the Amended FY 2014 budget, my FY 2015 budget will add $547 million new dollars to our K-12 school systems.

Our teachers work tirelessly to prepare our students for future success in higher education and their careers. They must be provided the resources necessary to do their jobs, and we must provide an environment that fosters success in the classroom. The funding my budget provides will enable us, in partnership with local school systems to restore those instructional days, eliminate teacher furloughs, and enhance teacher salaries. School systems will have the resources and flexibility to address the most critical needs of their students and teachers in order to ensure Georgia continues to attract and retain the very best teachers.

In addition to our direct investment in our teachers, we are also putting forth significant investments in other aspects of K-12 education. The Amended FY 2014 budget provides additional funding for Forestland Protection grants for local communities, which will provide a total of $22.6 million in immediate assistance to local schools.

My Amended FY 2014 and FY 2015 budgets also include nearly $45 million through bonds and new funding to expand digital learning opportunities and wireless technology in every classroom in the state. These funds will allow school systems to upgrade their technology infrastructure so that every school in this state has access to high speed internet, expand virtual course opportunities to additional K-12 students, and provide traditional brick and mortar teachers with more virtual resources to use in their classrooms.

We also want to reward and encourage school systems who implement innovative new programs within their schools to improve student education. Therefore, I have included $5 million to establish the Georgia Innovation Fund to allow schools systems to apply for grants to assist them in implementing these programs and sharing their successful methods with other schools around the state.

Finally, I have included an additional $10 million to develop rigorous statewide assessments to ensure that every student leaves our K-12 system adequately prepared for postsecondary education or the workplace. This provides a total of $26.6 million to ensure our children are on the right track throughout their educational careers.

We know that by 2020, over 60% of jobs in Goergia will require some form of postsecondary credential from either a technical college or a university. To help our students meet this benchmark, my FY 2015 budget provides nearly $47 million in additional financial assistance for our students to use in accessing the high quality higher education opportunities we have in this state. This includes more than $22 million to provide a three percent increase in the award amount for HOPE scholarships and grants to assist students with tuition and an additional $5 million for the Strategic Industries Workforce Development Grant.

Furthermore, I am proposing implementing three new programs to expand access to higher education to more students. Just as the Zell Miller Scholarship within our HOPE Scholarship program provides full tuition to high-achieving students in our University System, my budget proposes the creation of a Zell Miller Grant as part of the HOPE Grant to cover the full cost of tuition for those Technical College students maintaining a 3.5 grade point average. I am also proposing $2 million in new funds for the REACH Georgia scholarship to provide needs based scholarships to support those promising students participating in the REACH Georgia mentorship program. Finally, my budget includes an additional $10 million to establish a new low interest loan program exclusively for our technical college students that will provide affordable financial options to those students when other scholarship and grant opportunities have been fully utilized.

In addition to investing in our citizens to create a world class workforce, my budget also invests in building and maintaining the infrastructure necessary to attract business development. The Amended budget includes $25 million for REBA and OneGeorgia grants and loans programs. These grants and loans offer our cities and counties the ability to compete nationally to attract and retain businesses in their communities.

Georgia is uniquely positioned as a transportation hub for our nation. We must make sure that we maintain and improve our transportation infrastructure so that we are prepared for the additional demand new business will bring to our state. The Amended FY 2014 and FY 2015 budgets include more than $46 million in new funding for road and bridge projects, including $19.5 million for the Georgia Transportation Infrastructure Bank which enables local communities to leverage public and private funding for strategic transportation projects in those areas.

In looking to the future for those investment opportunities that will net the largest dividends for the state in the long term, we must not lose sight of the needs of our most vulnerable populations today. It is not enough to simply provide a child with educational opportunities during the day, but we must also make sure he or she has a safe environment waiting for them at home as well. My budget will provide $7.4 million as part of a three year commitment for additional caseworkers for the Division of Family and Children Services to ensure that every child's case receives the attention it demands. The budget also includes additional funding for caseworkers and emergency placement locations for abused, neglected, or at risk adults to ensure that they also have the protective oversight they need. Finally, we will continue to honor our commitments under the Department of Justice Settlement Agreement by providing an additional $34.5 million in FY 2015 to service our developmentally disabled and mental health consumers in the community.

As I stated earlier, we have made significant reductions in our state workforce over the last several years as a result of budget constraints. State employees have not had an adjustment to their salaries since 2008. We have made the same difficult decisions that many businesses in the private sector have also faced. However, as in the private sector, it is important to invest in your workforce when resources allow for it. Our employees are the foundation of the services that the state provides to its citizens, and we must recognize the contributions of those hard-working and dedicated individuals. My budget includes almost $40 million for state agencies and $11 million for the Board of Regents to provide performance based pay increases or to adjust salaries for certain positions to improve competitiveness in recruiting. For example, I am including almost $10 million in funding for the Department of Juvenile Justice and Department of Corrections to improve the salaries of our correctional officers to help those agencies in recruiting for those positions and keeping the trained and experienced officers we have. We want to ensure that we retain our best and brightest employees and also are able to attract talented new employees to careers in state government.

In closing, let me say that the future of this state is bright. I look forward to working with you during the session, and I know that together we will continue to show the world that Georgia is where you want to call home.


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