Budget Hearings Thoughts

Rep Davis: 

Constituents of the 109th district of Georgia:

The Budget Hearings have concluded as of last week and a new work week begins today. The Directors and Commissioners have laid out their plans for this year’s amended budget and next year’s budget in detailed manner. With the current climate and lack of tax revenues from all layers of government it is very clear that we have some difficult and challenging decisions ahead. Yet, I have observed some “anomalies” in the amended budget to put it kindly. I am most alarmed by the influx and reliance on federal dollars that can now be seen in Georgia. The marching in of these dollars can be seen with the marching out of control over our own state and local government. This money is reinforced with federal mandates and guidelines that dictate what our standards will be. This deeply troubles me because these federal requirements will remain, but the government will soon cut and run with their funding; leaving Georgians to pay the bill.

The FY 2011 budget is being presented as $18.1 Billion but the actual budget with all stimulus and other federal dollars is a whooping $39.1 Billion. I see my task as your representative as to save the taxpayers of Georgia money and expense not only look at the proper use of the “state” dollars but also the continued acceptance of federal dollars and the transfer of power and loss of decision making authority of the State of Georgia. All of those $21 Billion federal dollars comes with demands and stipulations that further erode the independence of this state.

The $18.1 Billion in state dollars proposed by the Governor and his department leaders are filled with numerous new fees and taxes. I believe that these new fees and expenditures are unacceptable at a time when we need to live within our means. Below is a chart of the budget expenditures over the last 4 years.

xls budget spread sheet

As you can see the state revenue has been depleted. We have continually accepted and inserted federal dollars directed towards the programs the federal government believes are best. Moreover, by relying heavily on federal funding for education, we must follow their pre-design course and their structural guidelines or risk losing these dollars. In addition, we give up our local control over our own education system.

Education is always used as an example because it is traditionally the largest portion of the budget. However, another department surpasses education, the Department of Community Health (DCH). The government take over of our health care system does not live and die with President’s Obama bill as shown by this department. In this year’s budget, we are appropriating $2.2 Billion state dollars to the DCH. However, they are also receiving another $10.3 Billion in a combination of stimulus and other federal dollars for the colossal amount of $12.5 Billion budget.

Compare the DCH budget to the Education Department’s $9.7 Billion dollars and you can imagine the immensity of that department. While you hear about budget cuts to education I want to clear some things up and let you know that I am dissecting that department. While the governor’s proposal calls for a $479 Million reduction to the QBE formula (where teachers are paid) it also includes an increase to the Federal Programs Division of $714 Million. The total education budget is actually being increased for both the FY 2010 amended budget by $174 Million and then another $110 Million for the FY 2011. I will give a more complete break down of this department in my next update.

Commissioner of Georgia’s Department of Community Health, Dr. Meadows, presented her budget on Wednesday in complete detail which left me completely floored. Her proposal included several new taxes including the controversial new hospital provider fee of $1.6%. This new fee will cost hospitals $247 Million for the year at the expense of independently operated hospitals and to the benefit of government funded hospitals. Of the hospitals impacted, 39 will be winners and 84 will be losers while approximately another 38 that will not be impacted. This is a redistribution of wealth from private hospitals to big government funded hospitals. The benefactor of this will be Grady Hospital while many of the suburban hospitals, including Henry Medical Center (Approximately – $1.5 Million), will be one of the substantial losers.

Several other issues have caught my attention including the bond package of another $1 Billion in spending; with a majority of that being borrowed for repairs and updates to existing structure. Locally, I am disappointed to see the funding for the new Southern Crescent Technology College for our McDonough Campus in the proposal has been cut. I will work to see if I can get this project reinstated throughout the session. While GSIFC was giving this presentation, a few things have left me disturbed, the mention of $1.7 Billion in new bonds during calendar year 2009 even though only $1 Billion were approved. Additionally, they mentioned some $750 Million in refinanced bonds. However, I was unable to understand the savings that will come from this refinance. Lastly, the Governor has infused an additional $300 Million into the budget from the refinancing of the GEFA loans made to local governments for the water and sewage infrastructure. What needs to be determined is how did one pull $300 Million in capital funds on a refinance? I cannot imagine the total size of the GEFA loan portfolio. I am not sure if this refinance of the bonds will save the locals any money at all.

I am writing this to let you know that in my new capacity as a member of the House Appropriations Committee, I will bring you the most complete and comprehensive information possible. If any of you have suggestions, please do not hesitate to call the office.

Thank you for the honor of serving you in the Georgia House of Representatives.

Representative Steve Davis

Posted via email from Jim Nichols