Budget Writers Announce Surprise That The Loss Of 2BN In Stimulus Funds With Flat Economy Leaves 2BN Budget Gap

December 14, 2010 10:08 am

by Charlie · 39 comments

Math is hard:

Senate Appropriations Chairman Jack Hill, R-Reidsville, warned Monday that the state’s budget hole for next fiscal year is closer to $2 billion than to the $1 billion that’s been discussed.

Hill was in Athens with other lawmakers for a pre-legislative session conference and spoke to WABE’s Denis O’Hayer, the local host of “All Things Considered.” You can hear the entire interview on WABE’s website.

In the the interview, Hill acknowledged that the state’s budget hole for fiscal 2012, which begins July 1, is at about $2 billion and drops to $1.3 billion once you consider the loss of one-time funding or federal cash as well an expected round of cuts to state agencies.

That temperature you feel today isn’t just the weather.  It’s also the cold reality that election rhetoric and wishful thinking now has to be translated into hard numbers before January.   If the lump of coal given this season by the Budget committee was real instead of metaphorical, you could at least burn it to keep warm.

 

Three Jack December 14, 2010 at 10:51 am

it’s hard to take these guys seriously when they authorize millions for land acquisition to save a black bear habitat. and millions more to make georgia a top fishing destination.

hey but on the bright side, we have a new governor who can just walk into most n. ga banks and get millions in loans without worry of collateral. and he knows how to play the creditor game so who better to take the calls than a guy who owes more than he could possibly ever come up with.

B Balz December 14, 2010 at 11:21 am

$28MM/$2Bn – 0.014%. Not chump change, but not the ‘saver’ for our budget woes, either.

In business, leverage is often used, sometimes with deleterious consequences, but is is neither illegal or unethical.

As yiou well know, it is called risk/reward and it is the stuff of successful legendary fortunes, as well as, disastrous failure. There is no default at this time, so your rhetoric is showing.

Sadly, SHE lost. So did Roy. Move on.

Few of us could come up with the scratch if all of OUR creditors called their loans, Tres Jacque.

Gerald December 14, 2010 at 11:46 am

“Sadly, SHE lost. So did Roy. Move on.”

Ummm … they will “move on” about the same time that the folks angry at Obama do the same. Or the folks before them that were angry at George W. Bush. Or Clinton, Reagan, LBJ, Lincoln … you name it.

People will ease off on Deal when he shows for the first time in his long political career that he is capable of being a principled, ethical and capable leader who is willing or able to make tough or smart choices. The early turns, what Deal has shown so far, aren’t promising. So far, the guy is looking like Sonny Perdue 2.0, or the typical southern Republican governor whose primary qualification is not being a Democrat.

B Balz December 14, 2010 at 1:54 pm

I hear you, Gerald. I think that the efficacy and ability of PP to be taken seriously, if ever, would increase inversely to anti-Gov. Deal rhetoric.

The man is a hard worker who doesn’t suffer fools well. I would imagine he doesn’t really pay too much attention to PP.

Three Jack December 14, 2010 at 11:52 am

this isn’t about karen. it’s about a bunch of guys who have outspent their budgets now being tasked with gaining control of themselves. and their new leader comes to the table with a less than stellar fiscal track record both personally and as a multi-term congressman. this reality does not inspire confidence considering how dire the situation seems to be.

gt7348b December 14, 2010 at 12:34 pm

Um, $28 million . $2 billion = 1.4%, but point still somewhat valid.

B Balz December 14, 2010 at 12:43 pm

I hate doing math in public….

Three Jack December 14, 2010 at 1:32 pm

gt, i threw that out as an example. add up many similar unnecessary expenditures and eventually you find a much higher percentage. $40m for gofish, $30m for land that you turned down at $15m 2 years earlier, there are numerous examples.

B Balz December 14, 2010 at 1:51 pm

Good points, all, Three jack. Who would sneer at getting ‘only’ $1MM dollars for their project, much less $28MM?

I know the Oaky land deal included ‘wetlands’ AKA swamp. I wonder what the % of wetlands was to the overall acreage?

Daniel N. Adams December 14, 2010 at 11:04 am

There is no shortfall if you start at Zero… hence the name “Zero Based Budgeting.”

It’s cool because when you run out of money, YOU STOP SPENDING!

B Balz December 14, 2010 at 11:15 am

Simplistic and unrealistic explanation of ZBB. Superficial rhetoric, Daniel.

ZBB MAY have a limited use in State Gov’t, rolling departments fromm year-to-year. ZBB creates a lot of problems as well, ask President Carter.

Gerald December 14, 2010 at 11:47 am

Simplistic solutions, sound bytes and slogans in response to complex problems that require difficult choices and sacrifices? Where would politics be without those?

B Balz December 14, 2010 at 12:45 pm

Touche’

Jeff December 14, 2010 at 1:53 pm

My Chairman’s explanation may have been simplistic, unrealistic, and/ or superficial. I don’t think so, but I’ll allow it for now for the sake of argument.

What is not simplistic, unrealistic, and/or superficial is that even under the plan that passed the Gold Dome last year, 1/4 of all state programs would have to justify their existence and budgets every single year.

What does this mean?

Walk with me, please. Go to open.georgia.gov. Look at the latest salaries for the Department of Education – which is Ga’s biggest-budgeted department.

When you do, you will see nearly 500 people with salaries above $50K/year. This, out of a total employment of 1195, per this site. When sorting by salary, you will see that on the first page of 2o results, the low salary is within $150 of $113K. Of the titles on this page, you will find FIVE “State Supt Schools, Deputy”s, each with a salary in excess of $135K. You will find another EIGHT positions listed as “State Supt Schools, Associate”, each with a salary of $114K-$118K. Within the remaining 480 or so people with salaries above $50K/year, you will find quite a few people with titles such as “Education Administrator” and “Prog Eval & Dvlpmnt Spec”

The first 13 listed would total a MINIMUM of almost $1.5 MILLION saved simply by eliminating the positions. The remaining 480 or so would spare another $24 MILLION. Note that SOME of those 480 are genuinely needed. As a former teacher, I would argue that the “Education Administrator”s and “Prog Eval & Dvlpmnt Spec”s most certainly are not.

The point being, under ZBB, the Department would have to justify each of those positions – as well as every other penny it spends – in an open committee hearing, at a bare minimum. Considering that even ONE of those 500 positions could fund at a MINIMUM 1.5 first year bachelor’s degree teachers or on the high ($50K/yr) end a teacher with a Bachelor’s and 21+ yrs in the classroom or a Master’s and 6 yrs in the classroom or a PhD and 3 yrs in the classroom, which would you rather have – yet another bureacrat or someone who can actually teach our children? THOSE are the types of questions each and every Department in the State would face every four years, and thus ZBB would help curb spending.

B Balz December 14, 2010 at 2:01 pm

Very compelling, Jeff. I am going out on a limb here, but my guess is that WITHOUT using ZBB, those positions and titles will be under very close scrutiny this year.

My point is that many of the same outcomes can occur without ZBB, which is costly and difficult to implement.

We agree, Mr. Barge had better look closely at making the Dept. of Education a whole lot less top-heavy. Whether he uses ZBB, a divining rod, a dart board, to trim that Department, it shall be done.

Next up? Dept. of Administrative Services, which GREW in double digits last year….

Jeff December 14, 2010 at 2:07 pm

B Balz:

Had the State been using ZBB 4 years ago, we wouldn’t be facing AS massive cuts as we have over the past couple of years (and will continue to see for at least this year).

But because each and every Department wasn’t forced to defend every single penny it spends at least once per Governor term, government was able to grow and grow and grow at a pace FAR faster than inflation + population growth. Indeed, we didn’t start cutting until we had NO other choice, and then it was a case of the “gotchas”. For example: saving what was it, a million or two on furloughs? Rather than taking a swing at some of the positions detailed above? DoE knew exactly what it was doing – causing a political firestorm that it had HOPED would shield it from further cuts – and let’s be honest, it was fairly successful in that regard.

Goldwater Conservative December 14, 2010 at 2:37 pm

If increasing tax revenue were at all a topic for discussion we probably would not be facing most of these issues.

Jeff December 14, 2010 at 3:16 pm

Enough of my money is already stolen – too much, in fact. Raising taxes is NOT an option – reducing government IS.

Goldwater Conservative December 14, 2010 at 3:41 pm

If you do not want to pay to live in the US then leave. It is that simple.

You could also start advocating for the laying off of police, teachers, fire fighters, judges, prosecutors, etc.

Raising taxes must be an option, the government is already too small to do its job to begin with.

Jeff December 14, 2010 at 3:47 pm

Clearly, you and I have MUCH different views of what the government’s job is.

Sad thing is, per my knowledge of the man, MY views are much closer to Goldwater’s than yours. Admittedly, he was a couple of decades before my time though, so my knowledge is based on what I’ve read of the man.

Goldwater Conservative December 14, 2010 at 9:06 pm

You may have knowledge of the “rhetoric [he] vomited,” his words, not the man. I worked for the guy for over a decade.

I commend you for acknowledging that what you know was learned from what you have read. Odd as it may seem, Hillary Clinton, for a long time, considered herself a Goldwater conservative as well.

Barry was extremely suspicious of the excesses of capitalism and strongly believed that the government should use its constitutionally defined powers to protect The People, not profits.

B Balz December 15, 2010 at 11:17 am

@Goldwater Conservative

Wow, you worked with Barry Goldwater, that is pretty cool. At some point, please share one of your most memorable anecdotes. Please!

TheEiger December 15, 2010 at 7:31 am

“Raising taxes must be an option, the government is already too small to do its job to begin with.”

I can not respond. I’m just laughing at how dumb of a statement that is.

DTK December 15, 2010 at 5:25 pm

@GoldwaterConservative

“Socialism-through-Welfarism poses a far greater danger to freedom than Socialism-through-Nationalization precisely because it is more difficult to combat. The evils of Nationalization are self-evident and immediate. Those of Welfarism are veiled and tend to be postponed. People can understand the consequences of turning over ownership of the steel industry, say, to the State; and they can be counted on to oppose such a proposal. But let the government increase its contribution to the “Public Assistance” program and we will, at most, grumble about excessive government spending. The effect of Welfarism on freedom will be felt later on – after its beneficiaries have become its victims, after dependence on government has turned into bondage and it is too late to unlock the jail.”

- Goldwater, Barry “The Conscience of a Conservative” (1960), pg. 49.

analogkid December 14, 2010 at 8:36 pm

[G]overnment was able to grow and grow and grow at a pace FAR faster than inflation + population growth.

Well, just to be clear, according to Rep. Elect Brockway’s numbers, four years the budget outpaced Population + Inflation, and four years it did not. The average over eight years shows that the budget grew less than I+P.

Carry on.

Lone Star Georgian December 14, 2010 at 11:06 pm

The idea of ZBB makes me chuckle. I can only imagine the new government positions that would be required to fill out the ridiculous paperwork justifying every position and program the state funds.

In fact, I bet we would have to hire more “Prog Eval and Dvlpmnt Spec”s to do the job!

B Balz December 15, 2010 at 11:21 am

Thank YOU!

People talk about ZBB without any real understanding of the practical cost and overhead in using that technique. Reminds of Sigma Six and then Lean Sig.

Great stuff if you are a global operation, with 37 operating divisions, etc. ZBB has a lot of overhead and similar results can be achieved without the cost and hassle.

ZBB was tried at the Federal level, and was discarded for general use as it was unwieldy, costly and offered fewer than anticipated results.

Let’s not let past experience, coupled with facts slow us down, though.

Dave Bearse December 14, 2010 at 11:23 am

It’s warm cake, not cold reality. When the self-proclaimed fiscally conservative General Assembly requires only 24 hours to consider and approve the elimination of all state income taxes on rich seniors on the penultimate day of the session, reducing revenues by tens of millions if not over a hundred million annually, there’s clearly enough fluff to make identification of budget cuts a piece of cake.

Spacey G December 14, 2010 at 11:40 am

Peach Pundit sure has come a long way since I got kicked off of the front page. I’m almost disappointed to see excellent local/GA reporters such as Dennis O’Hayer quoted here. I liked Peach Pundit better’n when it was just knuckle-draggers. Change is hard for me.

Lady Thinker December 14, 2010 at 11:22 pm

Why were you kicked off?

Kellie December 15, 2010 at 6:03 am

They found out she is a girl. :)

Lady Thinker December 16, 2010 at 9:00 am

Figures.

Chris December 14, 2010 at 1:37 pm

It’s not that Math is hard. It’s that most of these yahoos when to UGA where math is a post-doctorate course.

Goldwater Conservative December 14, 2010 at 2:36 pm

“went to,” Chris. Where did you graduate?

SouthGa December 14, 2010 at 9:16 pm

+ten for GC, or is it +tin?

Bill30097 December 14, 2010 at 9:40 pm

abolish welfare and medicaid. Why should I be forced to pay for someone else?

Cloverhurst December 15, 2010 at 12:50 am

A 2 billion dollar budget hole is huge.

It’s important to remember that Georgia spends less per capita than any other state in the country.

TheEiger December 15, 2010 at 7:34 am

“It’s important to remember that Georgia spends less per capita than any other state in the country.”

So what? That’s a good thing. Let’s keep it that way. Just because other failed state governments are spending more is the last reason we should spend more.

Harry December 16, 2010 at 6:29 pm

“It’s important to remember that Georgia spends less per capita than any other state in the country.”

That’s not true.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=521

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