Georgia Budget Issues. Senator Jack Hill 4 th District

Transcription

1 Georgia Budget Issues Senator Jack Hill 4 th District 1

2 2015 Budget Issues Individual Income Tax trends economic recovery Other Post Employment Benefits (OPEB) edicaid Enrollment Growth Rural Hospitals Pension funding Employee leave payout 2

3 FY15G Department of Revenue Collections Estimate by Source Alcohol, Tobacco, iscellaneous 6% Title Fee 4% otor Fuel Funds 5% Sales and Use Taxes 28% Income Tax - Individual 52% Income Tax - Corporate 5% 3

4 FY2007 Final S D FY2008 Final S D FY2009 Final S D FY2010 Final S D FY2011 Final S D FY2012 Final S D FY2013 Final S D J 12 onth Trailing Growth Rate 8.0% 7.8% 7.8% 5.9% 5.2% 3.0% 2.2% 3.6% -2.0% -1.1% -7.0% -4.3% -10.5% -9.1% -12.0% -17.0% -15.9% 4

5 FY2012 Final J A S O N D J F A FY2013 Final J A S O N D J F A FY14 Final J 12 onth Trailing Growth Rate: Individual Income Tax 14.0% 13.1% 12.0% 10.0% 8.0% 6.0% 5.9% 4.0% 2.0% 0.0% -2.0% -1.0% 1.9% 12 onth Trailing Growth Rate 5

6 Department of Revenue Collections FY06-FY14 $20,000 $15,000 $16,366 $17,640 $17,450 $15,619 $14,199 $15,310 $16,053 $17,004 $17,884 $10,000 $5,000 $- FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 *Only compares revenues collected and reported by the Department of Revenue (primarily tax revenue). Other agency collections, such as insurance premium taxes, are not included. 6

7 Other Post Employment Benefits (OPEB) The report of the actuary on the retiree medical valuations as of June 30, 2013 includes: The UAAL for the State Employee OPEB Fund is $3,587,913,000. The UAAL for the School Personnel OPEB Fund is $10,788,794,736. The combined UAAL for the two OPEB funds was $361 million lower than last years report. UAAL = Unfunded Actuarial Accrued Liability ARC = Annual Required Contribution The combined ARC for the two OPEB funds is $1.1 billion. 7

8 Other Post Employment Benefits (OPEB) Currently financing benefits on a Pay As You Go basis Assets not accumulating in an advance funding strategy Bond raters noted the substantial OPEB liability Reforms enacted in FY13 include requiring retirees pay based on the retiree's length of service Other high rated states focusing on OPEB funding 8

9 Formula Funded Areas FY08-FY % Change Difference Georgia Population 9,697,838 9,992,167* 3.03% 294,329 Education K-12 FTEs 1,627,660 1,700, % 73,028 Regents FTEs 235, , % 39,269 TCSG FTEs 73,897 77, % 3,611 Health edicaid Enrollees 1,268,682 1,641, % PeachCare Enrollees 252, , % 339,506 Corrections Inmates 59,795 55, % -4,127 Probationers 142, , % 21,388 *from Census as of July 1,

10 1,400,000 edicaid Enrollment FY05-FY14 1,200,000 1,000, , , , ,000 - FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 edicaid: Aged, Blind, and Disabled Total Low-Income edicaid Total 10

11 2008A to 2015G Budget Comparison 2008A 2015G Higher Education 15% Bonds 5% All Other 11% edicaid/ PeachCare 12% Education 40% Health and Human Services 8% Bonds 5% Higher Education 14% All Other 8% edicaid/ PeachCare 15% Education 40% Health and Human Services 8% Prisons, Courts, Public Safety 9% Prisons, Courts, Public Safety 10% 11

12 Rural Hospitals Ongoing Challenges Cash Flow Continue to struggle with cash flow Population Support Base As of June, Georgia with 159 counties had almost 153 hospitals for 10 million people where by comparison South Carolina has about 5 million population with 66 hospitals and 46 counties Georgia rural hospitals depending on much smaller sustaining population Payor ix Payor mix with cost reimbursement shifting Governor recognized the problem and appointed Rural Hospital Stabilization Committee April

13 Retirement Systems According to the Pew Center of the States, Georgia in 2010 was considered a solid performer in terms of its pension system. Teachers Retirement System (TRS) 81.1% funded with $66.5 billion in assets 108,000 Retirees/beneficiaries with an annual payout of $3.7 billion Employees Retirement System (ERS) 71.4% funded with $13 billion in assets 63,500 Retirees/beneficiaries with an annual payout of $1.38 billion 13

14 ERS Changes in embership

15 250,000 TRS Changes in embership , , ,000 Retirees Actives 50,

16 Employee Leave Payout Overall, payout costs and turnover rates among state agency and USG employees have increased over time 1 During the recession, average turnover among state agency employees dropped from 16.4% to 13.4% 1 Now that the economy is improving, employees are starting to find jobs or retiring, in some cases triggering large employee leave payouts for agencies, even as their base of active employees declines *From Department of Audits and Accounts Report entitled Employee Annual and Sick Leave Addendum August 19, 2014, page 5. Covers activities related to state agency employees in fiscal years 2008 through 2013 and USG employees in fiscal years 2010 through

17 Employee Leave Payout *Chart from Department of Audits and Accounts Report entitled Employee Annual and Sick Leave Addendum August 19,

18 Employee Leave Payout *Chart from Department of Audits and Accounts Report entitled Employee Annual and Sick Leave Addendum August 19,

19 Takeaways Great progress in recovering from the recession After 2 months, FY15 revenues are up 4.5% RSR approaching $1B Triple AAA bond rating but we need to address -OPEB -maintain funding pension annual required contributions -continued emphasis on state employee compensation. 19

20 Questions? 20