SENATE BUDGET AND EVALUATION OFFICE Overview of the Georgia State Revenues and Budget Slides are up to date as of 4/29/10. Please note that numbers are subject to change and more information become available.

FY10 Revenue Story In March 2008, the General Assembly passed HB990, the FY09 General Budget, that assumed $20.1 billion in revenue collections. Final FY09 revenues were actually $16.77 billion. In January, the Governor proposed a FY10 budget based on $18.5 billion in revenues (3.23% over the original FY09 Amended revenue estimate and 8.20% below HB990). However, this revenue estimate would have been 10.23% over the final FY09 revenues. In February, the Governor lowered the estimate to $16.99 billion, and this estimate formed the basis of HB119, the FY10 General budget (2.64% below a reduced FY09 Amended revenue estimate and 15.6% below HB990). This revenue estimate was 1.36% over the final FY09 revenues. In November 2009, the state bond documents show a revised draft revenue estimate of $15.7 billion, a $4.4 billion shortfall from the original HB990 (6.2% below FY09 actual revenues and a 22% decline from HB990) In January 2010, the Governor’s revenue estimate for the FY10 Amended Budget was $15.5 billion, a $4.6 billion shortfall from the original HB990 (7.3% below FY09 actual revenues and a 23% decline from HB990) In March 2010, the Governor revised his revenue estimate for the FY10 Amended by $340 million to $15.2 billion. This is a $4.9 billion shortfall from the original HB990 (9.3% below FY09 actual revenues and a 24.4% decline from HB990)

FY10 Amended Revenue Estimate

FY11 Budget – As Passed The FY11 revenue estimate reflects a 17.9% decline from the original FY09 General budget of $20.1 billion or a $3.6 billion shortfall. The FY11 budget recognizes several sources of new revenue including:  $288 million in funds from the securitization of funds in GEFA  $96 million in funds from user fees  $229 million in funds from the hospital provider payment  $23.5 million in funds from passing legislation on the streamlined sales tax  $40 million in funds from increases in tax compliance and fraud prevention The FY11 budget is based on 4% growth over FY10

Reductions in FY11 The median cut to agencies in the Conference Committee version of the budget is 7% from FY10, with a cumulative cut of 18% from FY09. Spending overall has declined by 12.5% from FY09 and is projected to decline by 16.6% by 2012.

Reserves at $103.7 million

Dynamic Items in the State Fiscal Outlook Revenues are likely to start turning positive in the months to come  By recognizing new revenues (fees, hospital fees, deferral of sales tax exemptions, streamlined sales tax changes), the General Assembly has expanded the base over which revenues can grow.  The General Assembly also passed tax cuts which will off set growth in revenues. Budget contains funding for tax compliance officers/fraud detection staff projected to bring in around $141 million in the coming year ( $64 million was budgeted in FY11) Other forms of federal stimulus being discussed/problems passing stimulus that FY11 budget requires

Future “Holes” in the Budget State Health Benefit Plan Medicaid  Difficulty predicting the ABD shortfalls because of backlogs of SSI applications at the federal level State Employees Retirement System Growth in K-12 and Higher Education Behavioral Health