Governor’s Budget Cuts a Welcome Reversal
Few governors request state agencies to revise and reduce their budgets when the economy is humming, but Brian Kemp isn’t your average governor. He recently sent instructions to his agency chiefs to cut spending. Specifically, he requested a 4 percent reduction for amended fiscal year 2020 and another 6 percent for fiscal year 2021.
A letter to agency heads from the Office of Planning and Budget read, “Governor Kemp has challenged agency leaders to think critically about their organizations and to identify ways to streamline processes, better leverage technology, reduce duplication of efforts, and innovate in order to improve how we do business as a state.”
In other words, the governor wants the government to run like a lean business. Kemp defended his actions and explained, “To secure an even brighter future for our state, we must continue to budget conservatively, spend wisely, and put Georgia taxpayers first.” This shouldn’t come as a surprise given that he campaigned on such promises. To be frank, what he is asking isn’t beyond the pale and shouldn’t be that difficult to achieve.
This is the first time in almost a decade in which agencies have been asked to reel in their spending. This last occurred in the dark days of the Great Recession when state agency budgets were seemingly whittled down to the bone. These cuts, however, were necessary because revenues had plummeted, and since Georgia requires a balanced budget, spending needed to match income.
As a result, state spending hit a low-level mark at $17.9 billion for the 2011 budget. Despite an outcry from bureaucrats, Georgia survived on a bargain budget. As time passed, the economy slowly lumbered back into action, and Georgia’s spending under former Gov. Nathan Deal subsequently exploded. His last proposed budget for fiscal year 2019 was $26 billion. This represents an average annual increase of one billion dollars and a 45 percent increase in eight years. Meanwhile, in a similar time span, Georgia’s population has grown by around 9 percent.
While this spending represents an eye-popping surge, this isn’t to say that Deal and his predecessor Gov. Sonny Perdue didn’t diligently watch over Georgia’s financial health. Despite the recession and subsequent boom, Georgia maintained a balanced budget, kept its coveted AAA bond rating, refilled its rainy-day fund and its spending rates per capita remained relatively low. Lawmakers did all of this while only amending the tax code a couple of times to increase revenue.
Regardless of the previous administrations’ stewardship, the spending surge is evidently concerning to budget hawks, including Kemp. Sure, some analysts assert that the budget increases since 2010 are simply returning to pre-recession spending levels, and while this may be true, the fact that Georgia survived at far lower revenue levels per capita in the past seems to suggest that Georgia could still thrive on a smaller budget.
Taxpayers should be thrilled that Kemp appears poised to reduce agency spending and slow state government growth. Tacking on another billion or so dollars every year, as had previously been the case, represents unsustainable growth that would ultimately hurt Georgians. Cutting government fat should always be a big winner and is a welcome reversal after years of spending increases.
