Legislative Session is 40 days

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2 Legislative Session is 40 days Always starts on the second Monday of January Legislative clock can be stopped for recess or set to run straight through Legislation movement can be restricted when a chamber adjourns Longest legislative session in over 120 years went until April 29, 2011 The budget is the only piece of legislation required to be considered and passed

3 BUDGET VERSION Governor delivers budget proposal within the first five days of the session Joint Hearings (and sometimes Joint Subcommittee Hearings) the second week Pass House Version of Amended FY 15 Begin House Processes for FY 16 House usually passes final Amended bill and its version of the big budget at about the same time Budget does not adhere to the 30 th Day Senate Rule

4 House-y-wood Squares BUTCH PARRISH TERRY ENGLAND AMY CARTER TOM DICKSON X APPROPRIATIONS EARL ERHART KATIE DEMPSEY ANDY WELCH PENNY HOUSTON

5 $$$ Tic Tac Dough $$$ 78 members Freshmen are not typically appointed to serve during the first term. Leadership composed of the Chair and seven subcommittee chairs. Subcommittee chairs review and adjust budgets within their policy areas. Subcommittees vote out recommendations which are reviewed and balanced by leadership. Green Door is the insider term for the leadership group that reviews the subcommittees recommendations and balances. Leadership may weigh-in with new options, supplement or override a subcommittee s recommendation. Final subcommittee reports are compiled into the House version and voted out of the full committee and voted out of the House. Multiple opportunities to hear and give testimony.

6 Survivor State General Funds $20,000,000,000 $19,000,000,000 $18,000,000,000 $17,000,000,000 $16,000,000,000 $15,000,000,000 $14,000,000,000 $13,000,000,000 $12,000,000,000

7 50.0% 48.4% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 3.8% 9.2% 6.1% 10.6% 0.0% State General Funds Population K-12 Enrollment University System Enrollment Medicaid Enrollment

8 FY 08 by Policy Area FY 16 by Policy Area Public Safety 8.53% General Govt. 9.98% Economic Dev. and Transport. 6.23% Public Safety 8.72% General Govt. 8.74% Economic Dev. and Transport. 5.40% Health 19.85% Education 55.41% Health 22.23% Education 54.91%

9 BOND RATINGS Triple-A designation is critically important as the most widely accepted performance standard for measuring state budgets and making sound, long-term investments. Throughout the lean times, we have sustained our Triple A bond rating from all three rating agencies. Georgia is one of only 10 states with a Triple-A rating from all three rating agencies. Raters focus on EVERYTHING: government framework, economy, financial management, budgetary performance and flexibility, debt and liability profile. Bonds reflect our long-term priorities for the state s future. Education bonds for K-12 construction; higher education institutions; school equipment; and economic development projects, such as road and bridge repair/rehabilitation and transit, account for over 86% of all the debt authorized by the state in FY 2016: Higher Education $399.4 million 36% K-12 Education $271.5 million 25% Economic Development $280 million 25%

10 Forecasts future collections Chosen from a range of high to low Governor determines the final number with the expertise of the State Economist The Price Is Right The Revenue Estimate Designed to pace with revenues Prevents overspending Low estimates can create surplus and high estimates can create deficits

11 The $21 Billion Pyramid Lottery 4.5% Corporate 4.6% Motor Fuel 4.6% Fees 5.8% Other Taxes 9% Sales Tax 25.6% Individual Income Taxes 45.3%

12 What s My Line? $9,000,000,000 $8,000,000,000 $7,000,000,000 $6,000,000,000 $5,000,000,000 $4,000,000,000 Sales Tax Individual Income Tax Corporate Income Tax $3,000,000,000 $2,000,000,000 $1,000,000,000 $- FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

13 Budget instructions - submit at FY 16 levels. Workload and enrollment adjustments allowed for education, health/human and fringe requirements. Other adjustments must be redirected from existing funds within the department. Capped amounts for bond projects. Since the use of reserves to close out AFY 2008, budget instructions for six of the past nine years have required a cut plan from departments.

14 The Wheel FY 2016 Debt Mgmt., 5.6 Public Safety, 8.4 Health, 22.2 Government, 3.6 Education, 54.8 Economic Development, 5.4

15 Match Game 2016 Expenditures Revenues Debt Mgmt. 5.6% Public Safety 8.4% Health 22.2% Fees 6% Other Taxes 9% Sales Tax 26% Educatio n 54.8% Govt 3.6% Econ. Dev. 5.4% Income Taxes 50% Lottery 4% Motor Fuel 5%

16 What four state departments have billion dollar state fund budgets? Education $8.5 billion Board of Regents $2 billion Community Health $3 billion Corrections $1.2 billion

17 DOES YOUR AGENCY NEED TO USE A LIFE LINE? Rank Agency FY 16 State Funds Percent of Budget 6 Behavioral Health and Developmental Disabilities, Dept. of $988,416, % 7 Transportation, Department of $890,537, % 8 Student Finance Commission, Georgia $717,162, % 9 Human Services, Department of $555,998, % 10 Early Care and Learning, Department of $376,822, % 11 Technical College System of Georgia $339,934, % Remaining 38 Agencies $1,983,371, % Total $20,836,744,620

18 Family Feud The Conference Committee House and Senate SENATE HOUSE

19 What Do Conferees Fight About? Survey says FY 16 New Revenue - $992 Million Education 69% GO Debt 10% Economic Development 4% General Government 4% Corrections 9% Health 4%

20 Survey also says It s Not All Up For Grabs! Non-Discretionary Spending Discretionary Non-Discretionary Spending by Policy Area Medicaid and Peachcare 16% K-12 Education 47% Higher Education 12% Correction Systems 8% Non-discretionary Spending 82.6% Pre-K 2% HOPE 3% Transportation 5% General Obligation Debt 7%

21 Naked And Afraid Zero-based Budgeting Rebuild a budget from zero with more than one scenario. Piloted in FY 12 and per SB 33 (2012) requires all agencies to complete the process once within 7 years. This year, 69% or 227 of Georgia s existing 328* budgeted programs for FY 2017 will have completed the ZBB process. Performance Audits Requested through the committee for a thorough review of spending and options for best practices.

22 Baring All With ZBB Cons Often limited a year before implementing the recommendations Redundancy in a postrecession Time-consuming Fixed costs are fixed costs Continuity of data Pros Legislature has a chance to review, provide input and make statutory changes Refines and modernizes purposes Updates Code accordingly Creates more meaningful and updated performance measures May capture valuable tax dollars Continuity of data Sunset allows lawmakers to renew or reject as a viable, ongoing budgeting tool

23 Tax Exemptions Special exceptions from the generally defined tax base as tax credits, deductions or reduced rates for certain types of activities. Value should be considered a part of government resources or grant allocated for a given purpose. Not all exemptions translate into revenue that would be collected. Combined with budget, it better represents the distribution of the benefits of government expenditures. Georgia s largest exemptions are for the individual citizen: $ 1.02 billion Retirement and Social Security $ 738 million Personal Exemption $ 611 million Food Sales $ 452 million Prescriptions $ 186 million Standard Deduction $ 37 million Child and Dependent Care Credit

24 BE OUR HOUSE GUEST 24-7: Information Online Complete Appropriations Acts, as well as the tracking sheets, are posted on the House Budget and Research Office website: US/budgetdocuments.aspx Completed Study Committee Reports are posted on the House Committees page: US/StudyCommittees.aspx Live and archived video broadcasts of the House Floor and House full committee meetings: US/VideoBroadcasts.aspx

25 Terry England House Appropriations 245 State Capitol Atlanta, GA