Gov. Brian Kemp has taken an unusual step in directing state agencies to cut their budget proposals by 4% this fiscal year and an additional 6% in the next fiscal year. This marks the first time such cuts have been ordered since the Great Recession when the state’s economy was hammered.
The governor said: “I have instructed all state government offices to reduce expenditures and streamline operations through proactive leadership. By reducing waste and ending duplication in government, we can keep Georgia the best place to live, work and raise a family.”
Kemp cited several factors behind his decision, including a campaign pledge for reduced spending and more efficient government. He also wants to pay for his priority programs, particularly a $2,000 annual pay increase for teachers in addition to $3,000 approved for this year’s budget. The budget cuts are in line with Kemp’s oft-stated goals of keeping our state a top location for small businesses, reforming state government and strengthening rural Georgia. Another factor is uncertainty about the outlook for the nation’s economy amid growing worries over a recession and the impact of the ongoing trade war with China.
The latest budget cutting comes a few months after the new Kemp administration imposed a month’s suspension of contributions to the state’s health benefit plan that covers more than 600,000 teachers, state employees, retirees and their dependents. This produced a saving of about $235 million to help ensure the state funded its budget for fiscal 2019, which ended June 30.
The governor, however, has put the matter in a positive light, saying he is “very optimistic about our economy in our state.” Even so, it’s better to do the budget cutting “when times are good rather than waiting for a crisis to do that,” he said. “I think it’s a great time for us to take advantage of something that I campaigned on – making government more efficient. Streamline it. It will continue to give us the resources that we need to fund our priorities, and that’s really what the directive is about.”
Kemp expressed confidence that state officials “will come up with some creative ways” to carry out his directive. He also said the objectives of the new budget cuts fit with his four-point plan that includes maintaining Georgia’s standing as a top location for small businesses, reforming state government, strengthening rural areas of the state and putting “hardworking Georgians first.”
In response to the governor’s initiative, Speaker David Ralston announced that the House Appropriations Committee will take the unusual step of holding hearings this fall on the budget instead of waiting for the 2020 legislative session. Ralston said: “Looking for cuts in an already lean state budget will not be an easy task and will require some difficult decisions regarding service delivery and personnel levels in each state agency.” He pledged to work closely with the governor, state agencies and the state Senate in tackling the issues. The speaker’s move underscores the key role legislators will play in this matter, and it certainly makes good sense for them to begin the process early.
Raising an objection to Kemp’s decision was the Georgia Budget & Policy Institute, which told an Atlanta TV reporter: “Georgia does not have a spending problem and in fact ranks 50th in the growth of state spending since the recession. These budget cuts are in stark contrast to the needs of a growing state. Georgia lawmakers can end this manufactured budget crisis by enacting smart reforms.”
It’s quite a stretch to say the state has no spending problem in view of the situation Georgia finds itself in as set forth above and the concern over signs of a recession ahead. In our view, the governor has acted prudently to tighten state spending and move toward long-term reform of fiscal policies in keeping with his well-known conservative philosophy. This should redound to the ultimate benefit of Georgia taxpayers. We believe the governor has set forth solid reasons for his actions. And we hope this will indeed address the issues requiring attention by our elected officials and lead to leaner, more efficient government in Georgia.