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The Beginnings of a Budget: FY 2017

July 12, 2016
"Budget" written on a chalkboard.

Every year the motion of a single pen marks the path for billions of state dollars, designating the areas where they can be spent. For fiscal year 2017, Governor Nathan Deal signed a $23.7 billion state budget, which supports education, boosts transportation funding and focuses on serving Georgia citizens through an efficient use of resources.

FY 2017 Budget Highlights

For example, the FY 2017 budget includes $825 million in new state general and motor fuel funds for transportation. This results largely from changes to motor fuel taxes and other fees or credits passed during the 2015 legislative session.

The governor and General Assembly also added $8.9 million for the continuation of criminal justice reforms, a priority of Governor Deal. Such reforms involve inmate education initiatives and an expansion of community-based alternatives to sentencing. These efforts not only help improve lives but also reduce costs.

Since education is a high priority, the budget further contains $300 million in additional funds intended for K-12 teacher salary increases and $26.2 million for Pre-K teacher pay raises. It also grants raises to state employees, with particular focus on positions with high turnover.

The Budgeting Process

It takes most of the year to get to the point where the final signature is needed. The process begins in the summer when the governor works with the state economist and the Office of Planning and Budget (OPB) to set the revenue estimates, which determine how much can be appropriated in the budgets for the amended current and upcoming fiscal years.

In Georgia, the budget must balance. While the legislature cannot alter the revenue estimate, the governor has the ability to raise or lower the estimate before or during the session based on the latest economic information.

The FY 2017 budget was based on a projected growth rate for state general funds of 3.8 percent over the amended FY 2016 estimate. However, growth in mandatory spending related to enrollment increases in Medicaid and K-12 education have continued to consume large portions of new revenue each year.

State agencies submit their budget requests to OPB in the fall, based on budget instructions released during the summer. While the budget requests are for both the amended current and upcoming fiscal years, the amended budget primarily accounts for adjustments to enrollment growth for K-12 education, updates to the revenue estimate and a few other select items.

The governor and OPB consider the requests in the context of the availability of funds, the priorities of the state and the needs of other agencies. Through this process, the governor develops his budget recommendations, which he presents to the General Assembly within 5 days of the start of the legislative session in January. The two chambers of the General Assembly then consider the governor’s recommendations in the form of appropriations bills, beginning in the House.

The legislature can make changes to the governor’s recommendations, but it must pass a budget each year. Often the bills will go to a conference committee to work out the differences between the versions in each chamber. Once the bill is passed and the session ends, the governor has 40 days to sign the budget and issue any line-item vetoes for program funding or bond funding. In FY 2017, the governor vetoed only one line item, while issuing disregard statements for a few others.

After the bill is signed, OPB works with agencies to provide guidance and make sure actual expenditures align with appropriations. The fiscal year begins July 1.

About the Author

James Taylor works on communications and strategic planning at the Office of Planning and Budget.

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