Regents Take Action to Meet an Additional Two Percent Budget Cut

The Board of Regents of the University System of Georgia (USG) approved December 3rd in a special called meeting a change in health benefit plans for USG employees as well as a temporary fee for all USG students. The changes will help the System’s 35 colleges and universities meet an additional two percent reduction in the current Fiscal Year 2009 budget.

As a result of the board’s action today, as of Jan. 1, 2009, the employer contribution rate for health insurance for the System’s PPO and HMO health plans will be reduced from 75 percent to 70 percent. USG employees enrolled in these plans will thus pay increased premiums ranging from approximately $17 to $65 a month, depending upon the plan and number of individuals covered. The employer contribution rate for the Indemnity plan will be the same as the PPO plan. The employer rate for the System’s high deductible health plan will continue at its current level of 90 percent. This change will result in an additional $8 million in savings throughout the System.

Effective for the spring 2009 semester, all USG students will pay a temporary, one-semester fee: $100 at research universities and six other universities, $75 at most comprehensive universities, and $50 at two-year and state colleges. The fee will offset an additional $20 million in budget reductions at the institutions.

An additional $12 million in savings will occur as a result of instructions that allow all USG institutions to defer maintenance expenditures. This budget reduction measure initially was approved by the regents this past August and did not require additional approval in today’s meeting.

“These are difficult decisions,” said USG Chancellor Erroll B. Davis Jr. “The board’s action today will protect the System’s core teaching mission and maintain academic quality.”

The regents took action in August to reduce the System’s budget by six percent ($136 million), and also to approve contingency plans for additional reductions. Health care plans and the student fee were two components of these additional reduction plans.

-----
www.georgiafrontpage.com
Georgia Front Page
www.fayettefrontpage.com
Fayette Front Page

Land Preservation Funding: When Spending Is Saving

GFP Note: Those of us who do live in areas where land has been conserved do enjoy the benefits, and yes, we do pay extra in taxes for this luxury.

University of Georgia's Jeffrey Dorfman weighs in with his thoughts on budget cuts. We thought you'd enjoy his views on the subject.

Georgia is experiencing a budget shortfall that will force cuts of between 5 percent and 10 percent of the state budget. The governor and the General Assembly must consider any opportunity to reduce spending. Cuts of that magnitude won't be easy to make. Hopefully, the Georgia Land Conservation Program won't be among the cuts.

Most federal and state government programs today are transfer programs. That means they take money from one group and give it to another. Examples include Medicare, Medicaid, economic development subsidies and Social Security. Land preservation is a transfer program because the money comes from sources that may not directly benefit from the preserved land.

For example, if Joe Georgian's tax money is used to preserve privately-owned farmland or a park in an area he'll likely never visit, Joe may not see a direct benefit. Transfer programs can be unpopular with those on the taking end of the deal.

Give and get

Some transfer programs are still a good financial deal for taxpayers. For example, health and nutrition programs for pregnant women save taxpayers money because it's cheaper to provide prenatal care than bear the higher costs associated with low-weight or premature births.
In many cases, land preservation programs fall in this category. When farmland is preserved and kept in agricultural or timber production, taxpayers may have a lower total tax bill.

If the land is sold to a developer and houses are built on the land, it's likely that the taxes paid by the new homeowners will be less than the cost of providing services to the new residents. Research strongly supports this.

Unless the houses are expensive, between $200,000 and $300,000 in most parts of the state, or the residents have few kids who attend public school, taxpayers probably pay less to preserve the land in one time costs and in annual property tax breaks than they would pay to make up the budget shortfall caused by their new neighbors.

When parkland or natural lands are preserved, similar economic scenarios play out. Even better, if the parkland or nature areas are surrounded by development, the surrounding property values rise. Thus, those nearest to the preserved land pay more property taxes, potentially helping to offset some of the cost of the land preservation.

Under the Georgia Land Conservation Program local governments must put up some of the money, so these increased property taxes reduce the transfer program nature of the land preservation program even further.

Environmental benefits

Preserved land (whether farm, park, timber or just natural) provides environmental amenities. We get cleaner water, cleaner air and stormwater management. While a cleaner environment is likely something most of us value, these environmental benefits are also attractive to our wallets. Rather than having to build government facilities to accomplish these tasks, we get them for free from the preserved land, its soil and plant life.

In suburban settings, an acre of trees (such as a wooded, pocket park) can save the local government $1,000 per year in avoided costs. That is, taxpayers don't have to pay to build stormwater collection or water treatment facilities. These costs are easily overlooked since they're saved by not appearing in the budget, but taxpayers still should be happy about them.

Land preservation programs cost money, both in one time payments such as through the Georgia Land Conservation Program and in annual tax breaks such as the Conservation Use Assessment. In exchange, most Georgians realize they receive the non-monetary benefits of saving these lands, enjoying them and gaining environmental benefits.

Few people realize that we usually get some or all of the money spent on land preservation back through lower future taxes due to the land remaining undeveloped.

With both the environmental and economic upsides in mind, I hope we preserve and even expand funding for the Georgia Land Conservation Program during these tough budget times.

My work on this in Georgia and other programs can be found at the Web site http://landuse.uga.edu.

By Jeffrey Dorfman
University of Georgia

Jeffrey Dorfman is an economist with the University of Georgia College of Agricultural and Environmental Sciences.

-----
www.georgiafrontpage.com
www.fayettefrontpage.com