Release: Governor Delivers Functionally Balanced Budgets That Invest in Georgia’s Future

Governor Sonny Perdue today released his Amended Fiscal Year 2010 and Fiscal Year 2011 budgets today, delivering functionally balanced budgets that also continue to invest in Georgia’s future.

“We have actively managed the budget in a step-down approach as revenues have continued to slide,” said Governor Perdue. “Just as Georgians are balancing their checkbooks and making tough decisions in difficult times, the state must and will do the same.”

Governor Perdue’s recommended Amended 2010 budget totals $17.4 billion, a $1.2 billion reduction from the original FY 2010 budget, and the 2011 budget stands at $18.2 billion.
While there are spending cuts throughout both budgets, the Governor is recommending additional funding into the state’s mental health system to stabilize staffing levels in state hospitals and improve care for patients. $20 million is called for in the AFY 2010 budget and an additional $50 million in FY 2011.

“We cannot retreat from our duty to protect those who cannot protect themselves,” Governor Perdue said during his State of the State address on Wednesday. “I am convinced that Georgia can, Georgia must, and Georgia will adequately care for citizens in our state’s mental health program, even though this has been a daunting challenge that precedes my time as Governor.”

The Amended FY 2010 budget also includes $27 million to provide disaster assistance funding for storm damage and floods in south Georgia this spring and for September flooding in the Metro Atlanta area.

The FY 2011 budget includes just over $900 million in bond projects, including $168 million in construction, equipment and school buses for Georgia’s K-12 schools. There is also $121 million in projects at our state’s universities and another $44 million at technical schools, for a total of $333 million in education that signals a clear and continuing investment in Georgia’s future.

As he announced yesterday, the Governor also is recommending $300 million in transportation projects in the bond package as well. In addition to the $300 million, the Governor also recommended $68 million for the deepening of the Savannah River harbor. As the environmental studies near completion, the joint federal-state project will deepen the shipping channel from 42 feet to 48 feet allowing the world’s biggest ships to call on the Savannah Port.

To download a copy of both the Amended FY 2010 budget and the FY 2011 visit the Office of Planning and Budget’s home page -- http://www.opb.state.ga.us/ -- and look on the top right for the link.
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State Government Revenues Fall 16 Percent

/PRNewswire/ -- State governments took in nearly $1.7 trillion in total revenues in fiscal year 2008, a 15.8 percent decrease from 2007, according to new data on state government finances released by the U.S. Census Bureau. The largest share of those revenues came from taxes ($780.7 billion), which made up 46.5 percent. The decline was primarily because of a decrease in insurance trust revenue, which fell by $377.7 billion (72.7 percent).

Insurance trust systems are comprised of public employee retirement systems, the unemployment compensation system, state government workers' compensation programs and other state social insurance trusts.

Total state government expenditures increased 6.2 percent from fiscal year 2007,
totaling slightly more than $1.7 trillion in 2008. Education ($546.8 billion), public welfare
($412.1 billion) and highways ($107.2 billion) represented the top three outlays, accounting for nearly two-thirds of all state government total expenditures.

The findings come from the 2008 Annual Survey of State Government Finances, which includes data on revenues, expenditures, debt, and cash and security holdings for each state, as well as a national level summary. The major source of these finance statistics is the governments' own accounting systems, either directly from a government's own records or through intermediate reporting systems.

Eleven states spent more than 25 percent of total expenditures on public welfare, with Tennessee (32.8 percent), Maine (30.5 percent) and Rhode Island (29.8 percent) spending the highest percentage of their total expenditures.

Public welfare spending is used to support people based on need and includes such items as old-age assistance, temporary assistance for needy families, and commodities and services provided under welfare programs, including medical care or burial services.

Hawaii (11.5 percent), Alabama (10.1 percent) and South Carolina (9.9 percent) led in spending on public health and hospitals as a percentage of total expenditures.

In addition to state taxes, state lotteries were another way many state governments (including Washington, D.C.) raised revenue in 2008. Total state lottery ticket sales reached $77.3 billion in 2008, an increase of 1.8 percent from 2007. Lottery prize payouts represented $56.7 billion in expenditures, a 1.4 percent increase over the previous year. And lottery proceeds represented $18.2 billion in state government revenue, an increase of 2.9 percent. New York ($2.7 billion), Florida ($1.4 billion) and California ($1.2 billion) led the nation in lottery proceeds.

The data used in the tabulations came from state government records. As such, they are not subject to sampling error. Although quality assurance methods were applied to all phases of data collection and processing, the data are subject to nonsampling error, including errors of response and miscoding. For information, visit the Census Bureau's Web site at: http://www.census.gov/govs/www/index.html.

For information on Georgia expenditures, visit http://www.census.gov/govs/state/0811gast.html

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Bond Sale Nets Historic Low Interest Rates

$35 million in one-time savings captured in FY 2010; Annual debt service reduced by $10 million

Governor Sonny Perdue announced today that this week's general obligation bond sale netted the lowest interest rates in the history of the state, resulting in $35 million in budget savings in Fiscal Year 2010 and annual debt service reductions of $10 million in future years.
“This bond sale funds needed projects and creates jobs throughout Georgia,” Governor Perdue said. “Our strong bond ratings and sound fiscal management have allowed us to achieve significant budget savings that will continue to benefit Georgia for years to come.”

This week, the State of Georgia successfully sold $793,855,000 in general obligation bonds to fund new schools, public safety projects, road projects and other crucial infrastructure. The state was able to lock in a rate of 1.49 percent – the lowest rate in state history – for 5-year bonds and 2.99 percent for the 20-year bonds – also a record low rate.

The historic low rate on the 20-year bonds was the result of the state’s decision to issue Build America Bonds, an option provided to governmental issuers in the American Recovery and Reinvestment Act. Under this option, the state will receive a 35 percent interest rate subsidy from US Treasury. Build America Bonds, combined with traditional tax-exempt bonds, proved to be the most cost effective strategy for the transaction.

The rates translate into an annually recurring debt service savings of $10 million compared to originally budgeted amounts. This is in addition to annual savings against budget of $8.2 million attained in February and May, when the state sold more than $900 million in bonds collectively.
This week’s bond sale is a portion of the capital outlay program approved in the state’s 2010 budget. The sale was completed on a negotiated basis with both retail and institutional investors showing solid demand for Georgia's high-grade bonds. The state also accomplished a defeasance of maturities coming due in FY 2010, resulting in additional debt service savings of just over $35 million.

Moody's, Fitch, and Standard & Poor's assigned the triple-A bond rating with a stable outlook to the state’s General Obligation bonds last month. The rating firms’ individual ratings are Aaa, AAA and AAA, respectively. The triple-A ratings reflect the highest rating available to government issuers and demonstrate what a great value Georgia municipal bonds are to investors.
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