A Briefing on Georgia’s Budget and TABOR.  A presentation by Carolyn Bourdeaux to the Georgia Chapter of the AARP on […

Bourdeaux, Carolyn

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Georgia State University ScholarWorks @ Georgia State University CSLF Presentations Center for State and Local Finance 11-8-2012 Georgia’s Budget and TABOR Carolyn Bourdeaux Georgia State University Follow this and additional works at: https://scholarworks.gsu.edu/ays_cslf_presentations Recommended Citation Bourdeaux, Carolyn, "Georgia’s Budget and TABOR" (2012). CSLF Presentations. 35. https://scholarworks.gsu.edu/ays_cslf_presentations/35 This Article is brought to you for free and open access by the Center for State and Local Finance at ScholarWorks @ Georgia State University. It has been accepted for inclusion in CSLF Presentations by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact scholarworks@gsu.edu. Georgia’s Budget and TABORCarolyn BourdeauxAssociate Director, Fiscal Research CenterAndrew Young School, GSUTABOR and TELs• Tax/Expenditure Limitations (TELs)• Taxpayer Bill of Rights (TABOR)• 30 states have some sort of tax or expenditure limitation– As of 2005, 4 used population growth and inflation to determine allowable increase in expenditures or taxes.– GA’s is loosely modeled on Colorado which was suspended in 2005, but Colorado’s was much stricter– Most states have stepped back from TELS in light of the recent recession.SR20: Taxpayer Protection AmendmentSR20 Limits Expenditure Growth to:(1)  An amount equal to the fiscal year spending for any previous fiscal year; or(2)  An amount equal to the immediately preceding fiscal year spending adjusted for state government inflation and annual population change.Inflationary amount uses gross output of state and local governments Appropriations NOT Included:• Homeowners tax relief grants• Expenditures financed by:– Federal funds– User charges as long as such charges do not exceed the cost of goods or services– Lottery funds– Motor fuel– Tobacco settlement funds– CMO fees and nursing home provider fees– Other minor fund sourcesSpending Limit Override• The General Assembly may exceed the spending limit upon adoption of a joint resolution by 2/3rds vote in both houses.EXAMINING A SCENARIO IF TABOR WERE IN PLACE IN 1990…$7,166 $17,738 $17,165 $0$5,000$10,000$15,000$20,000$25,000$30,00019901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012MillionsActual Nominal Spending Levels* v. TABOR Scenarios 1990-2013TABOR Line with Actual Revenues Adjustment SFY Appropriations from Selected GF RevenuesTABOR Line - Classic Cap @ 1990= $20 billion *Note: The appropriations reflected here are based on those that would be considered as part of SR20, they do not include all appropriations.$2,432$2,247 $1,581 $0$500$1,000$1,500$2,000$2,500$3,000Real Per Capita Spending Actual* v. TABOR Scenarios Real Per Capita Spending CurrentTABOR Per Capita Spending Line - Classic Cap @1990 LevelsTABOR Per Capita as Written SR20*Note: The appropriations reflected here are based on those that would be considered as part of SR20, they do not include all appropriations.-30%Impact of SR20 • SR20 will have the effect of resetting state revenues at a lower base when revenues decline• This may or may not be a desirable result depending on your view of government– It may prevent expenditure response to “bubbles” and will scale back the scope of government– It will lock in low levels of spendingExcess Revenues• If revenue exceeds the limit on spending the excess shall be appropriated first to fund increases in enrollment in schools then:– Transfer to the Revenue Shortfall Reserve (RSR) until fund balance equals 15% of prior FY spending ($2.6 billion in FY13)– Retirement of existing GO debt ($22 billion in FY13)– If RSR is at 15% then will be used to reduce income tax by .25% ($404 million)GEORGIA’S CURRENT FISCAL SITUATIONState Tax RevenuesPersonal Income50%General Sales and Use33%Corporate Income and License4%Motor Fuels6%Insurance Premium2%Other5%Data Sources: OPB Budget in Brief FY12-FY13, Bureau of Economic Analysis GDP DeflatorState Tax Revenues Per Capita (2012 Dollars)$1,447$1,776$2,233 $2,191$1,750$0$250$500$750$1,000$1,250$1,500$1,750$2,000$2,250$2,50019851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013*20%Data Sources: Bureau of Economic Analysis, GDP DeflatorState Personal Income Per Capita(2012 Dollars)$36,793$38,462$36,800$20,000$22,000$24,000$26,000$28,000$30,000$32,000$34,000$36,000$38,000$40,000Data Sources: OPB Budget in Brief FY12-FY13, Bureau of Economic Analysis4.00%4.20%4.40%4.60%4.80%5.00%5.20%5.40%5.60%5.80%6.00%6.20%6.40%6.60%19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012$3.3 billionState Tax Revenues as % of Personal Income$1,960$2,386 $2,082 $2,473 $2,614 $2,752 $2,550 $2,298 $1,820 $1,782 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 $2,300 $2,500 $2,700 $2,900199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013GState Per Capita Appropriations (GDP)Source: Selected Summary Financial Information; Inflation Index Used:  NIPA Table 3.10.4, Row 48Per Capita State Appropriations Adjusted Using NIPA Inflation Index(State Funds, 2011 Dollars)Education39%Health19%Higher Education5%Public Safety9%Debt Service5%Transportation4%Human Resources3%Other16%State General Fund Expenditures1990 2000 2013Change 1990‐2013% Change 1990‐2000% Change 2000‐2013% Change 1990‐2013Agriculture $13.06 $8.21 $3.75  ($9.31) ‐37% ‐54% ‐71%Debt Service on Bonds $110.98 $97.16 $103.63  ($7.35) ‐12% 7% ‐7%Health and Human Services $488.66 $569.27 $404.82  ($83.84) 16% ‐29% ‐17%Corrections $163.45 $208.68 $136.02  ($27.43) 28% ‐35% ‐17%Economic Development $18.25 $21.45 $16.54  ($1.71) 18% ‐23% ‐9%Education $876.93 $1,005.45 $693.02  ($183.91) 15% ‐31% ‐21%General Government $79.41 $93.12 $36.21  ($43.20) 17% ‐61% ‐54%Higher Education $332.10 $415.01 $257.88  ($74.22) 25% ‐38% ‐22%Judicial $16.37 $20.44 $18.79  $2.42  25% ‐8% 15%Natural Resources $39.33 $28.47 $11.53  ($27.81) ‐28% ‐60% ‐71%Public Safety $44.64 $37.76 $20.97  ($23.67) ‐15% ‐44% ‐53%Transportation $203.02 $108.73 $78.65  ($124.36) ‐46% ‐28% ‐61%TOTAL $2,386 $2,614 $    1,782  ($604.37) 10% ‐32% ‐25% Per Capita Inflation Adjusted Growth by Policy Area FY 1990‐2013  (Amounts in 2011 Dollars, Includes All State Funds and Budget Stabilization/FMAP*)  *Includes budget stabilization funds, FMAP and other enhanced Medicaid assistance.  Inflation adjustment uses the NIPA index referenced in SR20. GA Compared to Other Southern StatesNote: This following analysis draws on Census data and uses 2010 as the basis for inflationary adjustment.  Additionally, the analysis looks at per student or per “full time equivalent, FTE” so numbers will not match to previous slides which used population and 2011 for its inflationary adjustment. Real Per Medicaid Enrollee Expenditures by Fund Source for the Average SLC State (in 2009 Dollars)Fund Source Trend Between 2000 and 2009 in Per Enrollee Expenditures by Fund Source2000 Share of Total 2009 Share of TotalPercent ChangeState/Local $1,945 34.17% $2,012 31.73% 3.45%Federal $3,747 65.83% $4,328 68.27% 15.50%Total $5,692 $6,340 11.38%Enrollment Total for SLC States (millions) 11.7 16.7 42.26%Revenue figures are from CMS estimates of per enrollee spending in Medicaid. Enrollment numbers are from counts of enrollments from December of each year. State and federal estimates are derived from FMAP annual shares for each state.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.State Comparisons 2000-2009(in 2009 Dollars)Overall Growth in ExpendituresEnrollee GrowthGrowth in Per Enrollee ExpendituresPer Enrollee Exp. 2000Rank in 2000Per EnrolleeExp. 2009Rank in 2009Change in RankAlabama 33% 37% -6% 5,432 9 5,086 14 -5Arkansas 75% 50% 23% 4,767 14 5,871 10 4Florida 62% 59% 14% 5,151 10 5,855 11 -1Georgia 28% 57% -18% 5,892 7 4,835 15 -8Kentucky 36% 30% 2% 6,959 1 7,089 3 -2Louisiana 79% 47% 15% 5,520 8 6,371 8 0Mississippi 51% 24% 17% 4,983 11 5,850 12 -1Missouri 52% 16% 30% 6,436 5 8,398 1 4North Carolina 61% 48% 6% 6,868 2 7,275 2 0Oklahoma 90% 51% 26% 4,955 13 6,265 9 4South Carolina 55% 15% 33% 4,981 12 6,606 6 6Tennessee 19% -11% 26% 4,092 15 5,150 13 2Texas 85% 80% 2% 6,323 6 6,469 7 -1Virginia 62% 59% 10% 6,455 4 7,088 4 0West Virginia 38% 27% 5% 6,561 3 6,886 5 -2Revenue figures are from CMS estimates of total spending in Medicaid. Enrollee estimates are based on December enrollment counts. Table uses national GDP price deflator to adjust for inflation.GA is 50th in the nation in per enrollee Medicaid spendingReal Per FTE K12 Education Revenues for the Average Southern State (in 2010 Dollars)Trend Between 2000 and 2010 in Per Pupil RevenuesRevenue Level 2000 Share of Total 2010 Share of Total Percent ChangeLocal $3,442 39.44% $4,208 40.16% 22.26%State $4,543 52.06% $4,687 44.74% 3.17%Federal $741 8.50% $1,582 15.10% 113.38%Total $8,726 $10,477 20.06%Total Enrollment for SLC States (millions) 16.68 18.28 10%Calculations are from revenue figures provided by the US Census F-33 Financial Survey and represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV); Table uses national GDP price deflator to adjust for inflation.K-12 Education Per Student Expenditures State Comparisons 2000-2010(in 2010 Dollars)Enroll-mentGrowthState Revenue Per FTE GrowthLocal Revenue Per FTE GrowthFederal Revenue Per FTE GrowthOverall Revenue  Per FTE GrowthOverall Revenue Per FTE 2000Rank in 2000Overall Revenue Per FTE 2010Rank in 2010Change in RankAlabama 3% -3% 24% 105% 15% 8,475 10 9,724 12 -2Arkansas 5% 55% -30% 132% 34% 7,994 12 10,677 9 3Florida 11% -33% 34% 115% 7% 9,355 4 9,986 11 -7Georgia 17% -16% 13% 147% 8% 9,967 1 10,745 6 -5Kentucky 5% 5% 26% 101% 21% 8,483 9 10,242 10 -1Louisiana -12% 27% 53% 149% 51% 8,073 11 12,191 1 10Mississippi -2% 12% 30% 106% 31% 6,958 15 9,086 13 2Missouri -2% 13% 0% 163% 15% 9,255 6 10,687 8 -2North-Carolina 13% -13% 97% 115% 27% 9,084 7 11,510 3 4Oklahoma 4% -7% 30% 54% 12% 7,891 13 8,843 14 -1South-Carolina 7% 3% 28% 113% 22% 8,909 8 10,840 5 3Tennessee 7% 16% 5% 75% 16% 7,453 14 8,654 15 -1Texas 19% -1% 12% 116% 15% 9,273 5 10,694 7 -2Virginia 10% 5% 22% 124% 20% 9,965 2 12,003 2 0West-Virginia -3% 0% 20% 99% 15% 9,764 3 11,275 4 -1Calculations from revenue figures provided by the US Census F-33 Financial Survey. Table uses national GDP price deflator to adjust for inflation.GA is 36th in the nation in per student K-12 revenuesReal Per FTE Revenues for Higher Education for the Average SLC State (in 2011 Dollars)Trend Between 2000 and 2011Fund Source 2000 Share of Total 2011Share of TotalPercent ChangeState/Local Appropriations $7,399 72.45% $6,072 58.79% -17.94%Tuition $2,814 27.55% $4,257 41.21% 51.27%Total $10,213 $10,328 1.13%Total Enrollment in SLC States (millions) 2.99 4.33 45.07%Revenue figures are from State Higher Education Executive Officers Association, State Higher Education Finance Report.  Numbers are adjusted using a GDP Price Deflator to make them comparable to other budgetary numbers in this presentation.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).Change in Real Revenues per College Student 2000-2011State/ Local Appropriations per FTETuition Per FTEOverall Spending Per FTEStudent GrowthOverall Funding Per FTE 2000Rank in 2000Overall Funding Per FTE 2011Rank in 2011Change in RankAlabama -15% 64% 16% 28% $10,242 8 $11,906 1 7Arkansas -16% 99% 10% 44% $8,969 12 $9,890 10 2Florida -24% 14% -14% 60% $9,518 10 $8,149 15 -5Georgia -44% 2% -37% 123% $14,314 1 $9,077 14 -13Kentucky -25% 36% -6% 41% $12,321 2 $11,527 3 -1Louisiana 17% 29% 20% 8% $7,868 15 $9,438 13 2Mississippi -31% 52% -10% 36% $10,587 5 $9,502 12 -7Missouri -28% 72% -1% 17% $11,309 4 $11,197 5 -1North Carolina -4% 23% 1% 64% $11,320 3 $11,461 4 -1Oklahoma -13% 259% 21% 26% $8,265 14 $9,964 9 5South Carolina -27% 73% 9% 37% $9,232 11 $10,042 8 3Tennessee 4% 17% 9% 25% $9,691 9 $10,516 7 2Texas -2% 19% 5% 44% $10,270 7 $10,761 6 1Virginia -25% 80% 10% 38% $10,568 6 $11,655 2 4West Virginia -10% 49% 13% 29% $8,722 13 $9,839 11 2GA is 49th in the nation in per student Higher Education revenuesReal Per Capita Highway Revenues for the Average SLC State (in 2010 Dollars)Fund Source Trend Between 2001 and 2010 in Per Capita Revenues2000 Share of Total 2010 Share of TotalPercent ChangeState/Local $290 69.83% $302 64.35% 4.02%Federal $125 30.17% $167 35.65% 33.35%Total $415 $469 12.87%Revenue figures are from Federal Highway Administration form SF-1The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.Revenue figures are from Federal Highway Administration form SF-1. Inflation adjustment is made using GDP Price Deflator.Change in Real Highway Revenues per Capita 2000-2010 (in 2010 dollars)State/ Local Federal OverallOverall Funding per Capita 2000Rank in 2000Overall Funding per Capita 2010Rank in 2010Change in RankAlabama -3% 31% 12% $355 9 $396 12 -3Arkansas -9% 32% 2% $484 4 $496 6 -2Florida 49% 22% 42% $318 12 $452 8 4Georgia -25% 30% -3% $282 14 $272 15 -1Kentucky 9% 5% 7% $516 2 $555 4 -2Louisiana 49% 58% 52% $353 10 $537 5 5Mississippi -24% 76% 7% $407 7 $435 10 -3Missouri 33% 27% 31% $455 6 $596 2 4North Carolina 21% -22% 9% $406 8 $442 9 -1Oklahoma -12% 139% 23% $477 5 $586 3 2South Carolina 37% 33% 36% $271 15 $368 13 2Tennessee -22% 38% -3% $316 13 $305 14 -1Texas 30% -8% 18% $338 11 $398 11 0Virginia -5% 24% 0% $485 3 $485 7 -4West Virginia -23% 28% -8% $767 1 $707 1 0GA is 50th in the nation in per capita revenues for highwaysOutlook for Georgia’s FY13 Budget• Growth projections: revenue estimate based on 4.9% growth over FY12 (for Dept. of Revenue collected funds)– Currently YTD coming in at 4.8% over FY12– Growth of $789 million over FY12• (Note: This is very close to what a SR20 growth amount would be.)FY13 Demands• FY13 Shortfalls include:– $354 million shortfall in Medicaid and Peachcare from population growth and issues in underfunding• $170 million available for K-12 RSR Midyear AdjustmentFY14 Demands• Assume 5% growth over current: $843 million• Areas of Demand$336 million in Medicaid growth$235 million loss from Provider Fee$43 million for Behavioral Health for DOJ Settlement $65 million est. ERS increase to meet ARC$55 million TRS increase to meet ARC$734 million in required funds$100 million est. for K-12 growth$100 million est. for Higher Ed growthFuture ExpectationsWith or without SR20, the theme of this next decade is going to be governmental retrenchment.• Federal retrenchment will affect funding for a variety of programs. • State growth is likely to be consumed disproportionately by health expenses and will only be sufficient to cover basic growth needs and fill holes created during the recession.• OPB has asked agencies to develop 3% cut scenarios for FY13A and FY14.• Local revenues will see several more years of pressure from declining property values.

Georgia’s Budget and TABOR

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Georgia’s Budget and TABOR

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