Lawmakers hear details of $19.8 billion budget plan for fiscal year 2014


Last week, members of the Georgia House and Senate Appropriations Committee met in joint session for initial hearings on the $19.8 billion state budget for fiscal year 2014 proposed by Gov. Nathan Deal.

The plan reflects an overall increase of $550 million over the current fiscal year’s budget and is based on a projected 4.8 percent increase in state revenues. The governor said the state should “maintain a cautious approach to the current and next fiscal year, focusing on meeting the basic needs of our growing state.”

Some highlights of the proposal include:
• An increase of $147.4 million to cover a projected 1.36 percent K-12 school enrollment increase and $40.9 million for Quality Basic Education equalization grants that the governor said would fully fund the program for the first time since 2008.
• $65 million in bond funding to the Georgia Environmental Facilities Authority for various water and sewer projects.
• $50 million for the deepening of the Savannah Harbor.
• An additional $35.4 million for the Department of Behavioral Health and Developmental Disabilities to fund the fourth year of the settlement agreement between Georgia and the U.S. Department of Justice.
• $16.1 million for a 3 percent increase in funding for HOPE Scholarship benefits.
• $8.1 million to the Georgia Regional Transportation Authority to offset the loss of federal and local funds for Xpress commuter bus operations in Metro Atlanta.
• $4.4 million to transfer the operation of the State Archives from the Secretary of State’s office to the University System.

Department of Community Health Commissioner David Cook told the committee that renewing the Medicaid provider fee is necessary to avoid a $550 million hole in the budget. The fee is paid by hospitals as a percentage of their net revenues and is currently scheduled to expire June 30.

The fee brings in approximately $240 million per year in direct payments from hospitals and also draws an estimated $430 million in federal matching funds for the Medicaid program. Without the provider fee revenue, Cook said the state would be forced to reduce the Medicaid reimbursements to doctors, hospitals and clinics by 20 percent, a move that would cause an estimated 10 to 20 hospitals in Georgia to shut down.

The Senate has already approved legislation (SB 24) to renew the provider fee, and the proposal is now pending in the House of Representatives.

Although Georgia is not out of the woods yet in terms of an economic recovery, there is good news concerning the state budget. Per capita spending by the state government is 17 percent less than it was 10 years ago, with 9,000 fewer employees on the state payroll. Depleted just a few years ago, Georgia’s Revenue Shortfall Fund has been rebuilt to a total of $378 million.

The separate budget proposals – the amended budget for the remainder of fiscal year 2013 and the annual budget for fiscal year 2014 – will be formally introduced in the House Appropriations Committee in the coming days. After final approval by the House, the budget plans will move to the Senate for consideration. In the likely event that there are differences between the versions that pass the House and the Senate, a conference committee will be appointed to iron out those differences.

Once reaching final approval, the legislation will go to Gov. Deal for his signature. He can also veto specific line items in the budget at his discretion.

The full General Assembly will be back in session in the coming week.

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