Friday, October 18, 2019
NOTES FROM THE SENATE, OCTOBER 18, 2019
GOVERNOR ISSUES FIRST NEGATIVE BUDGET INSTRUCTIONS IN SEVEN YEARS
Annually the Governor issues budget instructions to all executive agencies that establishes their amended and proposed budget parameters for the current and upcoming fiscal years. This year the instructions (available online at the Governor's Office of Planning and Budget Website available here: https://opb.georgia.gov/budget-documents/budget-instructions-current-year) covered the Governor's priorities of reforming state government to make it more responsive and accessible to citizens, improve program outcomes, and reduce costs to taxpayers. The Governor also challenged agency leaders to think critically about their organizations and identify ways to streamline processes, better leverage technology, reduce duplication efforts, and innovate in order to improve how we do business in the state.
The Governor is asking each agency to submit budget reduction proposals for Amended Fiscal Year 2020 of four percent and Fiscal Year 2021 of six percent, generating $218.1 million and $327.1 million respectively. To help ensure that future larger reductions would not be necessitated, beginning October 1st allotments of state funds were reduced withholding the estimated four percent, which on October 1st alone totaled over $19.3 million in reductions.
INSTRUCTIONS FLAT SINCE RECESSION
There have been no negative budget instructions since the end of the recession in budgets of 2013 and 2014 seven years ago. Instructions have been flat until this year when the Instructions allowed a 2% increase.
These budget areas are exempt from the cuts asked for by the Governor:
The QBE Education Formula, the Teaching Formula in the Board of Regents, Technical College System Teaching, NOW and COMP waiver match funds, Medicaid, Out of Home Care and Adoption Assistance payments, Judiciary, Legislature, ERS and Workers Comp.
AGENCY REQUESTS MEET GOVERNOR'S GOAL
As agencies met the submission deadline of September 6th to the Governor's Office of Planning and Budget for review, OPB also released agency submissions located on their website here: https://opb.georgia.gov/budget-information/budget-process. While some agencies submitted detailed plans, others noted more generic explanations regarding meeting the reduction target. Regardless of what agencies specified, beginning this month agencies are already taking actions to meet their budget reductions.
As agencies evaluate their budgets, many have echoed Director Farr's remarks to the Joint Senate and House Appropriations Committee to minimize impact on staff and not affect the quality of their operations to meet their mission. Focusing on areas like travel, contracts (audits, compliance, research, consulting), efficiencies in technology and eliminating vacant positions are the first area of proposed cuts. While the proposed amended year cuts totaled $258 million, balanced with increases for Medicaid, K-12 Education, and higher education yield a net reduction totaling -$63.2 million.
HARD TO CUT WITHOUT AFFECTING PERSONNEL
Many agencies looking for reductions have the unavoidable reality that their state funding supports personnel and any reductions have impacts there. The Department for Corrections for example, which comprises 22% of the proposed Amended 4% budget reductions at $48.4 million, makes up about half of their mid-year reductions through personnel. Included are freezing vacant positions and making other personnel adjustments. With a state workforce at the end of FY2019 of 9,136, the current staffing is the lowest the Department of Corrections has experienced, even after accounting for the creation of Department of Community Supervision. Of the amended budget proposed reductions, agencies stated in documents that over $69 million of them included personnel.
SIGNIFICANT REDUCTION PROPOSALS OFFSET BY INCREASING COSTS
As noted earlier, while the 4% reductions for the amended budget generate over $215 million in savings, the net agency requests only propose net reductions of $63 million. This is because increased growth in Medicaid and Education, which are exempt, require additional funding in the mid-term budget. Medicaid and the Indigent Care Trust Fund are projected to increase an estimated $57 million. The Quality Basic Education Program which funds the K-12 system also proposed increases for the midterm totaling $72 million for enrollment growth, $26.3 million for the State Charter Schools Supplement, $10 million for the training and experience midterm adjustment.
Additionally, some increases are proposed for the judicial branch that appear in the current Agency requests and will be passed through the Governor's budget as the Legislature is the first group to review their budget proposals totaling around $2 million in the amended budget.
TOP AREAS OF PROPOSED BUDGET REDUCTION
Area of Government
Education- Board of Regents, Technical College System, some areas of State Department of Education
Health- Council on Developmental Disabilities, Department of Community Health, Drugs and Narcotics Agency, Ga. Board of Healthcare Workforce
Safe- Dept. of Community Supervision, Department of Corrections. Department of Defense, GBI, CJCC, Dept. of Juvenile Justice
Responsible & Efficient- State Accounting Office, DOAS, Office of Child Advocate, GEMA, DDS, Banking & Finance, ERS, Governor's Agencies, Labor Department, Law Department, Public Defenders, PSC, DOR, SOS
Growing- Department of Agriculture, Soil & Water Conservation, DCA, GEFA, Economic Development, Forestry Commission, Department of Natural Resources