With Spring finally here, tax cuts continue to be a topic of discussion in the Capitol halls. This week, the House and the Senate finally reached an agreement on the Fiscal Year 2008 Amended Budget and the House passed our version of the Fiscal Year 2009 Budget. I am happy to report that we were able to restore equalization grants and the majority of the austerity cuts to education that have been made in recent years.
Our work on the state budgets this year has been difficult due to a decreased revenue estimate. We found ourselves in a position of having to make some difficult mid-stream revisions to the budget, while still funding our state’s priorities, especially in education. Nationally, Georgia ranks 49th in per-capita spending but 9th in overall per-capita education spending. I believe this is evidence of the legislature’s continued commitment to fiscally conservative policies while funding our educational needs. I can tell you that my colleagues on the House Appropriations Committee worked tirelessly on these two budgets and I am proud to report to you that we have succeeded in funding our priorities.
In the FY08 Amended Budget, the original House proposal included $30 million in equalization grants for Georgia’s school systems. Our final agreement did include $20 million for those grants and we have funded the additional $10 million in the FY09 budget. We also funded over $50 million for trauma care to help hospitals like Grady in Atlanta that treat the critically injured, and $40 million for reservoir projects to meet Georgia’s future water needs. This midyear budget also included $210 million in bonds for school construction projects around the state. This budget was adopted by both the House and the Senate last week and signed by the Governor last Friday.
Earlier this session, I laid out for you the priorities of the House as we moved through the budget process. We have remained committed to funding education, healthcare, public safety and natural resources despite a $245 million downward revision in estimated revenue. Our top priority was to restore the $141 million in austerity cuts to education that have been made in recent years and after many weeks with long nights, we did restore $90 million of those cuts. While we have passed the House version of the budget, I and my colleagues will continue to work with the Senate in the last days of the session to restore the remaining $50 million in austerity cuts. I am also happy to report that the House fully funded the recommended 2.5 per cent pay raise for our teachers and state employees. Our teachers in Georgia are a critical resource and vital to the future of our state and we must continue to ensure we can recruit and retain high quality individuals to the profession. The budget also included a pay raise for our public safety officers. The measure was immediately transmitted to the Senate for consideration.
Both of these budgets are fiscally conservative and meet the needs of our citizens. The Governor must act within six days on the FY08 Amended Budget, and I hope the Senate moves quickly on the FY09 Budget and works with the House to fully restore education austerity cuts.
You may recall that last week the House adopted House Resolution 1246 that would allow Georgians to vote to eliminate the ‘birthday tax’ on personal vehicles over a two year period, eliminate the state’s portion of the ad valorem taxes on personal vehicles and property, and cap assessments on personal property at 2% per year and commercial property at 3% per year. Tied to this was a measure that would have provided for a $10 fee on every vehicle registered in Georgia to fund a statewide trauma care network. Also, the legislation required the dollars from the car tax received by cities, counties and school boards be refunded to these entities by the state, putting the burden of the tax cut on the state and not our local communities.
This week the Lieutenant Governor and members of the Senate announced a different tax plan that involves a reduction in the income tax paid by Georgians, rather than an elimination of the car tax. Based on the significant feedback I and my colleagues have received, I believe that Georgians strongly support the House’s plan to eliminate the car tax. It would permanently eliminate a tax on our citizenry and ensure Georgia’s families get significant and permanent relief. However, I am extremely encouraged that both the House and Senate agree that Georgians need tax relief in some form to help spur the economy and now the only question is how best to provide that relief. I look forward to the discussion and to bringing meaningful economic relief to Georgia’s families.
I will continue to keep you up to date on our actions as the legislative session progresses. Should you have any questions or concerns, please do not hesitate to contact me at my Capitol office at (404) 656- 0109. I look forward to hearing from you soon.