Eight years ago when I was running for state representative, I participated in a candidates’ forum where we were asked questions by voters on issues of interest to them.
Having served as mayor of Pooler for many years and having fought water wars with the state Environmental Protection Division (EPD) and the city of Savannah, I was quick to answer one voter’s question of what we candidates thought would be the most important issue in the upcoming session.
“No question about it” I replied. “It’ll be water and the need of growing communities for more water.”
“I disagree” an incumbent running in another district interjected. “Yes, water will be an important issue, but the No. 1 issue this session will be the same as every session and that is the budget.”
The seasoned politician was right then, and he would be right today. The No. 1 issue facing the state Legislature when it go into session a little more than a month from now will be the budget.
Since the economic downturn that started in mid-2008, our budgets for the state of Georgia have decreased in size and have increased in difficulty of balancing.
From a high of $20.5 billion in 2008 to a low of $17 billion in 2010 to the current $18.3 billion for 2012, the state budget over the past five years has been a bear to balance. But as hard as those budgets have been, the fiscal 2013 budget may be the most difficult yet.
Yes, revenues are up and that is a good sign. In fact, through October of this year, revenues are up on average 6.8 percent for the current fiscal year.
While this is a trend in the right direction and gives us all reason for hope and optimism, we must keep in mind that comparing numbers can be dangerous and sometimes misleading. Revenue figures from a year ago were low and compared to pre-2008 numbers were very low.
Our budgets over the past few years have been dependent on significant increases in revenue, and while we have been mostly successful in meeting those growth projections, the 2013 budget will be no exception as we will be depending on a 4 percent revenue growth on top of 2012 growth.
The question is being asked, can we “grow our way out of it” as some people have asserted. If the national recession continues, will we continue to see increasing revenues?
Also making the 2013 budget perhaps the toughest yet is the fact that no stimulus money will be available to help out. Regardless of how one feels about the federal stimulus program, the truth is that we used that money in the past few years to help balance our state’s budget. In fact, in 2010 we used more than $1 billion in stimulus funds to help make ends meet.
Another missing factor for this year’s budget will be the lack of reserve funds. During good times, the state has been able to build up its reserves, or “rainy day fund,” to be used during the lean years. While this has certainly helped over the past few years, the fund is low now and will not offer much help in softening the blow of lower revenues.
Also over the past few years, the state has done a good job of using one-time funds, such as selling GEFA bonds, to help balance the budget. Unfortunately, most of these opportunities have been exhausted.
So with revenue increases becoming more difficult to achieve, no more stimulus funds, depleted reserves and one-time fund opportunities no longer available, what other options are available?
Obviously, unless we are able to identify more revenue enhancements, more cuts will have to be made – and this is what will make the 2013 budget perhaps the toughest yet.
All departments have already suffered through budget cuts over the past few years. All the “easy” cuts – if there is such a thing – have already been made. The state universities and technical colleges didn’t receive any growth money in 2012, although their enrollment increased. Other departments have shared the same fate.
What will be the main issue in the 2012 legislative session? The same issue as always – the budget.
Sen. Buddy Carter can be reached at (404) 656-5109.