Traditionally for local governments in Georgia, this is budget season, with final tweaks being made in spending plans for the coming fiscal year, which for most starts July 1.
Traditionally, the state legislature would have finished its budget work a couple of months earlier, so that local governments would know what to expect in terms of state funding for both state and local needs and could react accordingly.
Traditionally, a new spending plan would go into effect in July, after months of analysis and debate by county commissioners, school board members and other elected officials across the state.
COVID-19 has, however, thrown tradition out the window, and officials at all levels, are scrambling to hammer out budget plans they hope will still make some semblance of sense months from now, given the uncertainty that seems sure to upend normal expectations of financial planning.
How do you project tax revenues when there’s no history nor trend that reflects current conditions? Do you dare raise some taxes and fees to keep from cutting essential services, knowing that many are facing hard economic times? How much of your “rainy day” reserves do you spend? How low do you let those surpluses drop, knowing there may be another emergency somewhere down the road?
Those are not easy questions to answer.
The Times editorial board
- Norman Baggs, general manager
- Shannon Casas, editor in chief
- Cheryl Brown
- David George
- Brent Hoffman
- J.C. Smith
- Tom Vivelo
- Mandy Harris
The state does not yet have a budget for FY2021, which by law starts in July. Lawmakers expect to return to the Capitol sometime during June to finalize what typically they would have finished sometime around the time that the winds of March were giving way to the showers of April.
Whenever state officials do gather to debate and vote, their decisions will not be easily made. In anticipation of the loss of as much as $4 billion in potential state revenue due to the economic downturn caused by the coronavirus, budget writers are trying to trim at least 14% from the state’s spending plan for next year.
That’s a huge reduction in a budget that most would have expected, just a few short months ago, to have a foundation of strong revenue growth rather than decline.
Consider that when legislators began their session year in January, there was talk of how much pay should be increased for teachers; now the discussion is whether school personnel will be furloughed or have their salaries reduced.
What a difference a few weeks makes. The fact that adoption of the state budget was delayed is actually a good thing; had a spending plan been passed based on the optimistic outlook prevalent pre-COVID, things would be a bigger mess.
It’s easy to understand the budget dilemma at both the state and local level. When you consider that the primary sources for revenue for state and local governments are income taxes, sales taxes and property taxes, and look at the reality of lost jobs, consumer shutdowns and personal financial woes likely to continue for months and years to come, there’s no doubting the revenue stream will be dramatically reduced.
Unlike those who control the purse strings in Washington, government officials in Georgia are required by law to have balanced budgets. Unlike Congress and the president, they cannot spend money they do not have. Though governments here likely will benefit from additional emergency funding from the federal government, the amount, timing and details of such are still among the many great unknowns that make planning for the coming year a challenge.
Just as state officials are searching for answers that will allow essential services to continue despite a huge hole in revenues, local officials have the same dilemma. As government offices at the local level reduce spending, the impact will be felt in every area of service provided, from road repair to public safety and education.
In some cases, vacant jobs will go unfilled. In others, existing jobs will be eliminated. Projects that seemed to make sense six months ago suddenly do not. Equipment will not be bought. Construction projects will be put on hold. Promised improvements to existing programming will be shelved. Needed expansion of services will be abandoned.
It isn’t that local governments haven’t been forced to plan for austere years before. They certainly have, and in retrospect it doesn’t seem that long ago. But the suddenness of this budget crisis makes it different, and the uncertainty of how to plan for a future that at this point seems totally unpredictable.
How soon will sales taxes rebound? How many land owners will have problems paying their property taxes? Will the area’s tourist business return, with all the economic benefits it brings? A litany of “how much, how soon, how likely” questions befuddle any of those involved in drafting spending plans for government agencies.
So how will all those potential reductions in government services affect you? In more ways than you can imagine.
Schools closed for furloughed teachers mean children at home in need of child care. Reduced numbers of first responders mean longer response time to emergencies. The wait time for an inspector for that home you are trying to build gets longer. The traffic gets worse because road work can’t be done. Those in dire financial straits suffer because programs to help can’t keep up with demand. The list goes on and on and on, as will the impact on our everyday lives.