The budget is always the Gold Dome’s biggest priority, as it is the only thing our Constitution requires us to accomplish. Thus, last week was filled with budgetary hearings to determine our way forward.
As always, we had a UGA economist discuss the overall picture for Georgia. Remarkably, our economy is doing very well. Because of the Governor’s decision to open up early and allow most businesses to operate safely, Georgia is in the fourth best position in the U.S. to rebound out of this tragic pandemic. He specifically added he was impressed by the “surprising innovation” our Georgia businesses showed to create new ways to serve customers during these challenging times.
Overall, we had about 4.6 million employed Georgians before the pandemic, and about 4.5 million now. The 100,000 lost jobs are mostly “voluntary” part-time employees who have chosen not to return to work. Despite what you hear from the mainstream media, there is not a rash of foreclosures and most people are paying their rent. In fact, due to all the federal money that has been given out, most Americans have more savings than they did before COVID. Thus, this is the first “recession” in history where people’s overall “incomes” have increased.
However, while much of the financial pain of COVID has been masked by federal dollars, that debt will eventually have to be paid off by our children. America is now almost $27 trillion in debt, up $4.2 trillion from last year alone. That means that every man, woman and child in the USA now owes $82,000.
In terms of revenue, collections from income taxes in Georgia are up 10% over the last six months, sale taxes are up 6%, and corporate income taxes are up 20%. On the other hand, COVID has stripped $12 billion from our hospitality and tourism industry; hotels are down 30%, and airline travel is down 60%.
In terms of highway travel, gasoline sales are almost back to where they were last year, while diesel (for trucks) is higher, reflecting the growth of shipping of merchandise via big-box retailers. Rural traffic is about the same as last year, while teleworking has reduced urban car traffic by about 10%.
Overall, the Governor is asking for a $27 billion state budget for fiscal year 2021. That is 2.5% less than the year before. For next year, however, we expect revenue growth of about 3.7%.
Last year, we cut about $1.6 billion from the previous year’s budget because of COVID. In the amended budget for fiscal year 2021, we will backfill (add) about $654 million, nearly all of it ($647 million) going directly to K-12 education. The federal government is also giving our schools an additional $2.1 billion with the CARES Act, and the Governor is proposing a one-time $1,000 bonus to every teacher. Overall, education is the big winner in this proposal.
The other winner will be health care, which will receive an additional $405 million for Medicaid and health care access for next year. The Governor also wants $20 million for rural broadband grants and $40 million for rural innovation. Thankfully, he is proposing no budget cuts, no furloughs and no new taxes.
I hope you will pray for me as I attempt to serve the people of Morgan and Newton counties. You may contact me at firstname.lastname@example.org.