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Agency report calls state budgets direction promising
Ga. Budget and Policy Institute analysis sets stage for next legislative session as tax changes loom
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Georgia budget

Increases in the 2016 state budget include:

• $280 million for partial restoration of the K-12 funding formula cut

• $80 million for growth in the Medicaid and PeachCare programs

• $140 million for increases in state employee and teacher retirement

• $51 million for a 1 percent merit-based state employee salary increase

Georgia ranks:

• 50th in Medicaid spending per patient

• 37th in spending per public school student

• 5th in the number of residents living in poverty

• 9th in the number of children living in poverty

Source: Georgia Budget and Policy Institute, gbpi.org

It’s never too soon to look ahead, particularly when it comes to politics and public policy.

But forecasts begin with reflecting on past trends.

That’s an approach the Georgia Budget and Policy Institute takes in its recently published “Georgia Budget Primer 2016” report.

Focused on education, health care, taxes and poverty, the nonpartisan, nonprofit group’s report sets the stage for the next session of the General Assembly.

“Lawmakers took a responsible stand in 2015 to fund the repair of Georgia’s roads and bridges, along with incremental boosts to education and other quality of life investments,” the report concludes. “Those are promising first steps in a direction that can lead to a better economic future for all Georgians.”

The state’s 2016 fiscal year budget includes $21.8 billion in state funding, $13.3 billion in federal funding and $5.8 billion in other funds.

Personal income taxes remain the largest share of state revenue, accounting for about $9.9 billion, or about 45 percent of the budget. Sales and use taxes, meanwhile, account for about $5.6 billion in revenue, or 4 percent of the budget.

But these proportions soon could flip. Republican lawmakers have rallied around proposals to lower the income tax rate and offset lost revenues with increases in consumption taxes.

The GBPI warns of the potential impact that move could have on lower-income families.

“Such a tax shift would hurt Georgia’s families and businesses by eroding investments in schools, public safety and other building blocks of a strong economy,” the report states. “Middle-class and low-income Georgians would end up paying more of their earnings in other, less equitable ways, while upper-income Georgians would get a substantial tax break.”

Education and health care dominate spending in the 2016 budget, with about $10.8 billion allocated to support public education

“The state’s 2016 budget adds $280 million more for K-12 education over the prior year,” the report states. “But education funding still falls $466 million short measured by the state’s own formula.”

The budget includes about $4.3 billion for health care expenses, with most of that total going to Medicaid and PeachCare programs.

Nearly $10 million in additional funds are allotted in the 2016 budget to manage growth in foster care programs.

The GBPI reports that the state has seen a 19 percent increase in the number of children placed in foster care since early 2014.

But the extras money is still not enough.

“The additional money is only enough to pay for increased capacity at current rates,” the report states. “Rates paid to foster families, child placing agencies and group homes could still prove inadequate to cover the cost of caring for children.”

Finally, the report finds that welfare recipients continue to grow along with poverty. The state is handling nearly 1.7 times as many welfare cases compared with pre-recession marks.

“The highest growth rate among these low-income supports is for food assistance, which grew by 108 percent in Georgia from November 2007 to February 2015,” the report states.

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