2021 Georgia Budget Primer

Š August 2020 Georgia Budget and Policy Institute All rights reserved.

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2021 Georgia Budget Primer

Table of Contents About GBPI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Letter from the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Budget and Racial Inequities in Georgia . . . . . . . . . . . . . . 5 Steps Along Georgia’s Budget Path . . . . . . . . . . . . . . . . . . . . . 6 Budget Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Georgia by the Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Pandemic Federal Funding . . . . . . . . . . . . . . . . . . . . . . . . . 18 Budget Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Costs of Schooling During Pandemic Threaten to Leave Georgia’s Black Belt Further Behind . . . . . . . . . . . . . . . . 30 Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Georgia Health Agencies Respond to COVID-19 Public Health Emergency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 New Federal Health Funding for COVID-19 Public Health Emergency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Human Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 COVID-19 and Georgia’s Unemployment Rates . . . . . . . . . 52 Criminal Legal System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Looking Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Contact Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

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About GBPI

The Georgia Budget and Policy Institute works to advance lasting solutions that expand economic opportunity and well-being for all Georgians.

GBPI’s Policy Team. From left to right: David Schaefer, research director; Laura Harker, senior policy analyst for health care; Alex Camardelle, senior policy analyst for economic mobility; Jennifer Lee, senior policy analyst for higher education; Stephen Owens, Ph.D., senior policy analyst for K-12 education; and Danny Kanso, policy analyst for budget and taxes. Not pictured: Stephanie Angel, policy fellow for immigration and criminal justice; Ray Khalfani, research associate; and Jyll Walsh, who is completing her doctoral practicum.

The Georgia Budget and Policy Institute works to advance lasting solutions that expand economic opportunity and wellbeing for all Georgians. We are a 501(c)3 nonprofit organization.

We depend on the generosity of foundations, corporations and individual donors.

If you would like to make a donation or find out more about us, please visit www.gbpi.org/donate.

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2021 Georgia Budget Primer

Letter from the President This year, lawmakers were faced with a choice to raise new revenues and help fund prosperity for all Georgians or to enact deep cuts into critical programs and services like health and education. Although lawmakers did vote to raise some new revenues, several options were left on the table, and the budget includes steep cuts that will affect children, nurses, teachers, retail workers and everyone else who calls Georgia home.

Taifa Smith Butler, Georgia is a low-tax, low-investment state; President and CEO even before COVID-19, we had not yet returned to pre-Great Recession funding levels when adjusted for population and inflation.

This means there are fewer dollars flowing to key programs and services meant to advance prosperity for Georgians. The information in this 60-page booklet and associated online resources summarizes Georgia’s 170-page appropriations bill so that you can better understand the effects of state spending on your life.

The Georgia Budget Primer 2021 is the Georgia Budget and Policy Institute’s signature annual publication that connects the dots between state revenues—investments in education, health care, human services and the justice system and the effects of the budget on the people of Georgia. We take seriously the opportunity to educate Georgians about the state’s spending and the effects on our quality of life. After all, the budget is the most important legislation that passes each year that outlines the state’s priorities.

Taifa S. Butler President & CEO gbpi.org | 3

Introduction Georgia plans to spend $25.9 billion in state money raised through taxes and fees for the 2021 fiscal year. The budget anticipates a revenue decrease of nine percent less than the prior year.

Many programs and services funded by the state budget faced steep cuts this year, and hundreds of state employees will face layoffs. Cuts stem in part from revenue shortfalls due to COVID-19, but even before the pandemic resulted in economic decline, lawmakers were cutting the budget to make up for lagging revenues.

The pages that follow are a guide to state spending for public services and programs meant to improve the quality of life for people across Georgia. The Georgia Budget Primer 2021 is a clear explanation of the state’s revenue collections and spending plan. It is an authoritative reference for the fiscal year that began July 1, 2021. It can help seasoned observers and novices alike understand the budget’s complexities.

This year’s budget process deviated from usual patterns. The governor proposed the 2021 state budget with deep cuts in January 2020. State lawmakers then modified it in early 2020.

In mid-March, the Legislature paused session due to the coronavirus. When session resumed in June 2020, new revenue shortfalls led to even steeper cuts. The final budget passed the Legislature and was signed into law in June 2020. Lawmakers will amend the 2021 state budget after the next legislative session starts in January 2021. Please visit www.gbpi.org for updates.

The state budget charts a course for Georgia communities.

The pages that follow explain where the state is headed—and opportunities to help every Georgian prosper.

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2021 Georgia Budget Primer

The Budget and Racial Inequities in Georgia Racial inequities persist in nearly every aspect of life in Georgia.

For example, compared to white Georgians, Black Georgians are less likely to have health insurance, more likely to attend under-resourced schools and more likely to work in industries that expose them to COVID-19 and that are more vulnerable to layoffs. These disparities in health, education and economic outcomes all stem from Georgia’s legacy of slavery and Jim Crow laws, as well as current racist, discriminatory policies.

In order to end these inequities, funds must flow to communities of color throughout Georgia to address their needs. However, steep budget cuts mean less funding for programs and services that could lead to greater prosperity for Black and Brown Georgians. The budget cuts will either maintain racial disparities or widen them.

Policies and Events That Contributed to the Modern Racial Divide

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Steps Along Georgia’s Budget Path

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2021 Georgia Budget Primer

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Budget Basics Georgia’s 2021 fiscal year runs July 1, 2020 through June 30, 2021. The total budget available to the state is $48.2 billion. That includes $25.9 billion in state funding, $15.1 billion in federal funding and $7.1 billion in agency funds. Prior to the Great Recession, in Fiscal Year (FY) 2008, the state of Georgia spent about $2,613 per person. Under the 2021 budget the state will spend $2,392 per person, about $2.4 billion less than if spending kept pace with the state’s growth in population and inflation.

The state budget outlines Georgia’s priorities, how it plans to spend money and how much revenue it expects to collect. It is the most important piece of legislation lawmakers pass. In fact, the budget is the only legislation that the General Assembly is legally mandated to pass each year. The Georgia Constitution requires the state to maintain a balanced budget, which means the government cannot spend more money than it collects in revenues.

The budget process is ongoing. Even as Georgia is implementing its current budget, it is auditing the previous year’s budget and planning for the next one. Beyond the General Assembly, many others participate in the process, including the governor, state budget director, state economists, agency leaders and budget officials, state auditors and the public.

Advocates need to engage with the budget process year-round. By reaching out to agency leaders in the summer and fall and lawmakers in the winter and spring, Georgians can inform the annual debate over the budget.

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2021 Georgia Budget Primer

Georgia by the Numbers Georgia’s budget for 2021 touches the lives of people in every corner of the state. The spending plan affects the quality of life for more than 10.8 million Georgians across the state’s many diverse communities. The lion’s share of that money is allocated to core investments in the state’s economic future, including education, health care, public safety and transportation. Here are some examples of the ways the state budget affects the lives of Georgians: 2 million Georgians who are seniors, disabled, children or parents with low incomes receive health care coverage and services ($3.5 billion in the 2021 state budget).

1.76 million children enroll in Georgia’s 2,300 K-12 public schools ($9.6 billion in the 2021 state budget), and 1.2 million are eligible for Free and Reduced Price School Meals.

436,000 students enroll in Georgia public colleges, universities or technical colleges ($2.6 billion in 2021 state budget).

297,000 Georgians live under correctional control, including 224,000 on probation, 52,000 incarcerated individuals and 21,000 parolees ($1.3 billion in 2021 state budget).

18,000 miles of state highway are overseen by the Department of Transportation, which will also direct $179 million in FY 2021 to help maintain and improve more than 100,000 miles of county roads and city streets ($1.7 billion total in 2021 state budget).

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Notes

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Revenue

Where Does Georgia’s Money Come From?

Georgia’s fiscal health depends on the state’s ability to raise money from a variety of sources in a reliable way. Like most states, Georgia collects revenue from a mix of personal and corporate income taxes, sales taxes, gas and vehicle taxes, and various other levies and fees.

Income taxes are the cornerstone of Georgia’s revenue system, accounting for half of all state funds. Sales taxes are the second largest revenue source, representing slightly less than a quarter of annual collections. A fair and reliable revenue system requires both types of taxes. Income taxes help balance the regressive effects of sales taxes and fees by allowing the state to collect a proportionate share of revenue from the wealthiest earners and most profitable corporations. A healthy income tax is also less sensitive to economic trends, which can boost revenue growth during good times but decline sharply when recessions occur.

Sales taxes provide a less consistent source of yearly revenue, and they fall more sharply on middle-class families and people with lower incomes. Sales taxes also historically lag behind innovations that spur changes in Georgia’s economy. However, sales taxes remain a core funding source that allows the state to generate revenue from consumption and economic inputs that would otherwise be exempt from taxation.

In April 2020, a new Georgia law began requiring most online retailers to collect and remit sales taxes to the state, including marketplace facilitators like Uber’s rideshare services or retailers like eBay. The state’s sales tax, however, is not applied to most services and large parts of the Georgia’s economy, such as construction labor, the finance industry, attorneys or physicians. Some sales tax exemptions were intentionally created to avoid taxing products families rely on, such as groceries, while sales on sales of items like digital downloads are not taxed because lawmakers have not proactively updated the tax code to include them.

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2021 Georgia Budget Primer

Income Tax Largest Source of State Revenue Revenue

Source: Governor’s Office of Planning and Budget, Revised Revenue Estimate for FY 2021.

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Source: Governor’s Office of Planning and Budget, Revised Revenue Estimate for FY 2021.

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Revenue

Georgia’s Funding Sources Georgia’s total 2021 budget, including federal funds, is $48.2 billion and is made up of six major funding sources: • General Funds – The state-funded portions of education, Medicaid and most other traditional state services are paid for through the General Fund, which includes money raised by income taxes, sales taxes and the motor fuel tax for transportation.

• Federal Funds – A large share of Georgia’s overall spending for health care, K-12 education, transportation and other services is paid through the administration of federal funds.

• Agency Funds – These include tuition and fees from colleges and university system research funds, in addition to regulatory fees and revenue raised directly by individual state agencies.

• Lottery Funds – These are dedicated to pre-Kindergarten programs and scholarships for higher education.

• Tobacco Settlement Funds or Grants – This ongoing annual payment, resulting from a legal settlement with the country’s four largest tobacco companies over health care costs, can be used for anything in the budget.

• Intrastate Transfers – The $4.3 billion of intrastate transfers include payments from the state health plan and are not counted in the $48.2 billion budget.

General and Federal Funds Make Up Most of $48.2 Billion

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

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2021 Georgia Budget Primer

General Funds

$22.4 Billion (50 percent of Georgia’s budget)

• • • • • • • •

Revenue

The General Fund derives largely from income taxes on personal and corporate earnings and sales taxes on consumer transactions.

The state also taxes motor fuel and assesses provider fees on hospitals and nursing homes. More than 97 cents of every dollar appropriated by the state pays for eight core priorities: K-12 Education (40 cents of every dollar spent) Health Care (21 cents) Higher Education (11 cents) Public Safety (2 cents) Criminal Justice and the Courts (8 cents) Transportation (7 cents) Debt Service (6 cents) Department of Human Services (3 cents)

The remaining General Fund spending is for state agencies, boards and commissions dedicated to state activities such as economic development, agriculture and forestry, and grant programs. The General Fund also covers costs of operating the legislative, judicial and executive branches of state government.

Not included in Georgia’s General Fund are state lottery proceeds and money dedicated to the Brain and Spinal Injury Trust Fund. Lottery proceeds are not included in the General Fund and account for about 5 percent of total state funds or $1.3 billion.

Motor Fuel Funds

$1.7 Billion (4 percent of Georgia’s budget) Georgia’s Constitution restricts spending revenue from state motor fuel taxes to roads and bridges. The money is dedicated to a mix of new construction, maintenance of existing infrastructure and debt service on past investments. Georgia’s 2020 motor fuel rates are 27.9 cents per gallon of gas and 31.3 cents per gallon of diesel, a slight uptick from last year. Recently, through an act of the governor that the state’s Department of Revenue has recognized as permanent, Georgia reinstituted a tax exemption on the sale of jet fuel, which will cost the state $36 million in FY 2021. The state’s 2021 budget includes $1.7 billion in motor fuel revenue, a decrease of about $200 million from the 2020 budget. gbpi.org | 15

Education and Health Care Over 70 Percent of State Budget

Revenue

2021 Fiscal Year $24.1 Billion General Fund and Motor Fuel Funds Budget

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

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Agency Funds

$6.4 Billion (13 percent of Georgia’s budget) Agency funds include $2.5 billion in tuition and fees collected by the University System of Georgia and the Technical College System of Georgia. The University System of Georgia accounts for $2.3 billion in research funds. The money is retained by the individual schools.

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

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2021 Georgia Budget Primer

Federal Funds

$15.2 Billion (31 percent of Georgia’s budget) Revenue

Money from the federal government flows to a range of state programs and services. Georgia spends the vast majority of federal money on the following: • • • •

$8.8 billion for Medicaid, PeachCare and other health care programs $2.3 billion for education, which includes school nutrition programs, services for low-income students and support for students with disabilities $1.7 billion for the Georgia Department of Transportation $1.5 billion for human services, Temporary Assistance for Needy Families and child welfare

Federal rules require the state to match federal funding for Medicaid and many other investments that benefit Georgians. As a result, changes in state funding levels typically track changes in federal funding. $15.2 Billion in Federal Funds Mostly Pay for Health Care, Education, Transportation and Human Services

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

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Revenue

Pandemic Federal Funding

$4.3 Billion (Included for reference. Funds are distributed between state and local governments, authorities and other public entities) As of August 1, 2020, the federal fiscal response to the COVID-19 pandemic includes two major legislative packages: the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES).

FFCRA funded free COVID-19 testing, enhanced unemployment insurance and suspended some burdensome requirements for recipients of the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), but the centerpiece of the legislation was the $36 billion in additional Medicaid funding to enhance each state’s matching Federal Medical Assistance Percentages (FMAP) rate by 6.2 percentage points. Through this enhancement, the state received about $700 million from March through July, with approximately $154 million used to cover Medicaid costs in the state’s FY 2021 budget.

The $2.2 trillion CARES Act provided the largest share of federal assistance to the state. The legislation provided funding to help state and local governments cover the direct costs of the COVID-19 response through the Coronavirus Relief Fund, along with funding for education, child care, transportation and more. For the most part, these funds provided a temporary stopgap to help cover a few months of costs directly related to the pandemic.

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2021 Georgia Budget Primer

Revenue

Source: Georgia House Budget and Research Office, “Georgia’s Federal Relief Funds for the Coronavirus Pandemic,” June 5, 2020.

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Revenue

Intrastate Transfers

$4.3 Billion (Included for reference, but not as a net increase to Georgia’s budget) Intrastate transfers are primarily payments from the State Health Benefit Plan.

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

2021 Tobacco Settlement Fund Budget $211 Million (0.4 percent of Georgia’s budget)

Georgia receives annual payments from a large settlement signed in 1998 with four of the country’s largest tobacco companies, known as the Tobacco Master Settlement Agreement. Georgia is not required to dedicate these payments for specific purposes. As a result, the use of tobacco settlement money can vary from year to year, though most of the money in recent budgets was allotted to health care.

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by governor.

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Budget Trends

Budget Trends The $25.9 billion state budget signed into law by Governor Brian Kemp for the 2021 fiscal year starting July 1, 2020 represents a $2.2 billion overall decrease in state spending from last year. To implement the cuts, most state agencies will receive about 10 percent less funding. FY 2021’s budget also relies on $250 million from the state’s revenue shortfall reserve.

The FY 2021 budget represents a second consecutive year of austerity after appropriators cut $159 million and over 1,000 vacant state jobs during the mid-year amendment to the FY 2020 budget. Georgia’s FY 2021 budget implements the steepest level of cuts since the worst year of the Great Recession (2009-10), including $1 billion in cuts to schools and the state Department of Education. Those cuts erased the effects of nearly a decade of slowly realized gains that allowed the state to fully fund K-12 education according to its long-established formula for just two years, 2019 and 2020.

With record levels of jobless claims and unprecedented volatility in revenue collections, state leaders responded to a sharp $2.45 billion downward revision in the state’s estimated collections by making $2.2 billion in cuts that primarily reduce funding for health care and education. Going forward, these budget cuts may accelerate the state’s downturn by cutting funding for core drivers of local economies. Lawmakers could address Georgia’s fiscal shortfall by raising revenue or eliminating existing tax breaks and loopholes to avoid further passing on the costs of deep budget cuts to local school districts, health care providers and communities across the state.

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2021 Georgia Budget Primer

State Savings Account Helps to Offset AFY 2020 and FY 2021 Budget Shortfalls

Budget Trends

The Revenue Shortfall Reserve (RSR), Georgia’s rainy day fund, provides stability in economic downturns. The fund is like a savings account to pay expenses and maintain services when revenues decline unexpectedly. Maintaining adequate reserve money helps Georgia keep its AAA bond rating, allowing the state to borrow on favorable terms and save millions in interest. Money is not appropriated into the RSR; the balance grows at the end of each fiscal year if there is surplus state revenue (up to 15 percent of prior year revenue).

Governor Kemp and the General Assembly agreed to use $100 million from the RSR in the AFY 2020 budget for the state’s initial pandemic response. Shortly after, Congress approved funding through the CARES Act that may be used to backfill these funds, and $250 million was incorporated into the FY 2021 budget to help address the projected revenue shortfall. As a result of the pandemic, the state collected $327 million less in taxes than the state estimated for FY 2020, resulting in a $427 million deficit. These figures do not include shortfalls to the University System of Georgia caused by reductions in tuition and fees or reduced payments collected by other state agencies as a result of the pandemic.

Rainy Day Fund Reaches $2.8 Billion, Helps Finance 2020-2021 Shortfall

Source:GBPI analysis AFY 2020/FY 2021 Governor’s Budget Report, GA DOR Summary of State General Fund Receipts (6/30, FY 2020).

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Budget Trends

Georgia’s 2021 Budget In FY 2021, the state of Georgia is poised to implement the deepest level of spending cuts since the worst year of the Great Recession (FY 2009 to 2010), reducing the state budget by $2.2 billion, or about 10 percent. After fully funding Georgia’s K-12 public schools for just two out of the past 17 years, during FY 2019-2020, schools are set to shoulder a $950 million shortfall in FY 2021. With state revenues already stretched thin in FY 2020 to meet the policy priorities of Governor Kemp and the General Assembly, the severe shortfall initiated in February 2020 by the COVID-19 pandemic upended Georgia’s positive momentum in prioritizing long-overdue pay raises for educators and improvements to the state’s Medicaid program. Below is a timeline of recent major state budget milestones July 2019: Georgia’s Revenue Shortfall Reserve reaches an all-time high balance of $2.81 billion, equivalent to about 11 percent of prior year General Fund revenue receipts.

May 2019: Governor Kemp signs Georgia’s $27.5 billion FY 2020 budget, including a $3,000 pay raise for K-12 teachers and a fully-funded education formula for the second time since 2003.

August 2019: Governor Kemp issues a directive mandating that most state agencies cut 4 percent ($200 million) from FY 2020 operations for the Amended Fiscal Year (AFY) 2020 budget and 6 percent for FY 2021. Enrollment-driven programs, such as public education and Medicaid, are exempt.

January 2020: Governor Kemp issues a revenue estimate of $28.1 billion for the FY 2021 fiscal year and includes in his executive budget pay raises for K-12 teachers and some state employees earning under $40,000 per year.

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March 2020: Governor Kemp declares a Public Health State of Emergency due to COVID-19. The General Assembly gives him broad powers, including the ability to unilaterally extend the state of emergency.

Budget Trends

On March 17, Governor Kemp signs into law the AFY 2020 budget, cutting an estimated 1,200 vacant personnel positions to reduce agency spending by about 4 percent. The General Assembly suspends the legislative session until mid-June.

May 2020: State agencies receive a memo from lawmakers instructing them to prepare a 14 percent budget reduction from the state’s original FY 2020 budget. Enrollment-driven programs are not exempt.

June 2020: Governor Kemp issues revised instructions, asking state agencies to prepare budget cut proposals of 11 percent or $2.6 billion in total reductions.

Shortly thereafter, Governor Kemp issues a revised revenue estimate of $25.9 billion, drawing $250 million from state reserves and bringing budget cuts to about 10 percent for most state agencies.

On June 25, the House and Senate agree to an FY 2021 budget that includes $2.2 billion in cuts. The budget is signed on June 30 and goes into effect on July 1.

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Budget Trends

Tax Breaks Erode Georgia’s Budget: $9 Billion in Foregone Revenue Collections in FY 2021 The Georgia General Assembly approved 11 tax bills in 2020.

Georgia’s assortment of tax breaks are meant to achieve policy goals such as driving economic growth or boosting family finances. However, the state continues to forego billions of dollars in state revenue each year through dozens of credits, deductions and other breaks, also known as tax expenditures.

The tax breaks will cost the state an estimated $9 billion in lost revenue in the 2021 fiscal year. Even by a more conservative estimate that excludes many of the tax expenditures commonly found in other states, Georgia’s tax breaks for industry and corporations still yield an annual cost of over $5 billion.

Some tax breaks provide key protections for families, such as the sales tax exemption on groceries, while others provide credits or incentives to specific industries or special-interest groups.

Several of Georgia’s largest tax breaks deliver outsized gains to select groups or industries—such as manufacturing, film or insurance—often with questionable benefit to the state or its people. Georgia lacks a formal review process to measure and compare costs and benefits of tax breaks, although proposals to improve transparency and accountability in the tax code have passed the state Senate with unanimous support in recent years.

Manufacturers, Film Industry Receive Georgia’s Largest Business Tax Breaks

FY 2021 Tax Expenditure Report, Fiscal Research Center, Georgia State University.

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Education

Georgia’s 2021 Education Budget Georgia lawmakers cut $1 billion from the state’s budget for the Department of Education. The bulk of these cuts, totaling $950 million, will be passed on to 181 local K-12 school systems.

State support for private school vouchers through tax credits and direct state funding face no budget cuts. Public school leaders will have to grapple with this 10 percent drop in state funding despite significant costs that many will experience as they continue to adapt to COVID-19. The remaining budget for the Department of Education is $9.6 billion for FY 2021.

The 2021 budget also cuts 10 percent from state higher education agencies, resulting in a budget of $2.3 billion for the University System of Georgia and $334 million for the Technical College System of Georgia. The state allocates $126 million in state funds for education programs administered by the Georgia Student Finance Commission, including Dual Enrollment, which pays for high school students to take college courses.

Lawmakers cut the 2021 budget for Dual Enrollment by $11 million following passage of legislation creating restrictions on student grade levels and courses.

The Legislature maintained lottery-funded education programs, appropriating $1.4 billion total, including $379 million for preKindergarten and $923 million for HOPE Scholarships, Grants and Student Access Loans. Lottery reserve funds total more than $1.2 billion.

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2021 Georgia Budget Primer

Two Decades, $10.2 Billion Cut from Public Schools Georgia lawmakers rejected calls to raise revenues during the 2020 General Assembly, resulting in steep cuts to education. The state has only fully funded the Quality Basic Education formula (QBE, which dictates the majority of state education funding) for two of the last 19 years. With the new cuts of $950 million to public education, children that began Kindergarten in FY 2009 will have attended schools that experienced $8.8 billion in cuts before they graduate.

Education

The years following the Great Recession showed that school leaders faced with steep budget cuts were likely to increase class sizes, furlough teachers, shorten the school year and eliminate elective courses. In FY 2021, Georgia’s schools will have less funding for additional costs that promise to arise due to the novel coronavirus, such as cleaning supplies or professional development for teachers facing continued online instruction.

Austerity Persists in Georgia’s School Funding Formula

Source: Georgia Department of Education.

State allotment sheet FY 2003 - 2021.

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Education

Costs of Schooling During Pandemic Threaten to Leave Georgia’s Black Belt Further Behind Black Georgians have traditionally received significantly fewer state dollars for public education than their white counterparts.

Relatively recent state policies have acted to equalize the funding for schools regardless of the students’ racial makeup. Even with these fiscal policies, however, school districts that are more rural, low-income and have majority-Black student populations face high obstacles to accessing the same educational opportunities as the rest of the state. These districts reside primarily in Georgia’s Black Belt, a swath of Middle and Southwest Georgia where slavery was once concentrated and where many Black Georgians live today.

Throughout the pandemic, school district leaders have struggled to plan how to educate children while also keeping the community safe. The lack of availability of high-speed internet leaves many Georgians unable to fully participate in a constitutionally-required free, public education.

Households in Black Belt school districts are twice as likely to lack access to high-speed internet than districts outside the region.

More than 13 percent of the households in the Black Belt lack access, while 5.7 percent of households in the rest of the state are in the same position. Black Belt districts are left again with higher obstacles and inadequate state funding to overcome them.

There is no uniform definition of the Black Belt in Georgia or throughout the Southeast. What began as a regional description based on the coloring and fertility of the soil has morphed into a term to generally describe communities in the Southeast with a majority-Black population or where the majority of people live in poverty. GBPI’s analysis considered a school district as part of the Black Belt if they operate in an area that previously had enslaved people greater than 40 percent of the population or if their current student body enrollment exceeded a 30 percent Black population and 30 percent or more of their students were living in poverty.

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2021 Georgia Budget Primer

School Districts in the Black Belt

Education

Students in Georgia Black Belt Less Likely to Have Access to High-Speed Internet

Sources: Based on a GBPI analysis of current enrollments and HOPE Scholarship eligibility, Governor’s Office of Student Achievement and GBPI Analysis of Georgia Department of Community Affairs data. Phase I Unserved Georgia by County. U.S. Census Bureau, Population Estimates Program (PEP); U.S. Census Bureau, American Community Survey (ACS).

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Transportation Costs Strain Local School Budgets

Education

For FY 2021, the state of Georgia continues a pattern of shortchanging pupil transportation that triggers safety concerns for local school districts. The FY 2021 budget provides $136 million for pupil transportation through QBE. The most recent data available shows that school districts spent $998 million in a single year to bus students to and from the school. Several districts’ plans to safely educate students in the current pandemic would require additional transportation expenditures.

Costs driven by factors such as the price of diesel fuel or the number of students enrolled have increased steadily while state funding has remained flat or decreased during the past two decades. This growth has continued the state trend of reducing its contribution to student transportation funding since 1991, when it covered 54 percent. In FY 2019 the state paid 13 percent of the total cost of pupil transportation.

Student Transportation Costs Increase Annually, Georgia State Funding Does Not

Source: U.S. Energy Information Administration. U.S. No 2 Diesel Retail Prices Dollars per Gallon; Bureau of Labor Statistics. Health Benefits; Georgia Department of Education.

Student Enrollment by Grade Level; QBE State Allotment Sheets, FY 2002 and FY 2021.

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2021 Georgia Budget Primer

Pre-Kindergarten Funding Steady and Inadequate Pre-Kindergarten funding remains steady in FY 2021 due to consistent lottery proceeds during the pandemic. Steady funding, however, is not the same as providing world-class early childhood education. For example, while lead teachers were allotted funding for a $3,000 raise in FY 2020, certified pre-K centers are only provided $16,190 for assistant teachers regardless of the employee’s training or experience. This pay could keep some qualified professionals from seeking those jobs.

Education

Moreover, stagnant funding keeps Georgia’s pre-K program from expanding and providing reimbursements to child care providers for capital improvements such as roof repair or air conditioning.

Georgia provides less per student in the program than the state did a decade ago. In FY 2011 Georgia allocated the equivalent of $5,050 per student. When taking inflation into account, that is $352 more than in the current budget cycle.

Per-Student Pre-K Funding Still Lags Behind Last Decade Amount less per child spent since 2011

Source: Georgia’s amended fiscal year budgets, 2011-2020; Georgia’s Fiscal Year 2021 Budget (HB 793); U.S. Department of Labor, CPI Inflation Calculator.

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Dual Enrollment

Education

Dual Enrollment is a program serving more than 50,000 high school students who take college-level courses that count for both high school and college credit. Colleges do not charge high school students, though students may be responsible for course-specific fees and transportation costs.

The 2021 budget cuts $11 million in state funds from Dual Enrollment, resulting in a final budget of $90 million. The Georgia Student Finance Commission, which administers the program, projects that recent policy changes will allow the agency to maintain payments to colleges delivering Dual Enrollment.

Originally, the state paid colleges for tuition, mandatory fees and books, as well as funding transportation grants. As participation grew, funding was cut for transportation grants, mandatory fees and books.

Recent Policy Changes to Dual Enrollment Create Estimated $11 Million Reduction: • • •

30-credit-hour funding cap for most students Core academic courses limited to 11th and 12th graders and some 10th graders with high SAT/ACT scores Career, technical and agricultural education (CTAE) course limited to 10th-12th graders

Dual Enrollment Students Grew More Racially and Ethnically Diverse in Recent Years

Note: Public high school Dual Enrollment students only.

Source: GBPI analysis of Department of Education data.

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2021 Georgia Budget Primer

University System of Georgia The 2021 budget for the university system is $2.3 billion. Georgia allocates $2 billion to colleges and universities for student instruction. Remaining funds go to agricultural services, public libraries and other programs connected to universities. The state appropriates funds to the Board of Regents, which manages the system and allocates money among its 26 schools.

Education

This year’s budget represents a 10 percent cut in state funding: a $261 million reduction overall, including a $233 million reduction to colleges. This cut is the sharpest one-year drop in university system history and eliminates many currently held and vacant faculty and staff positions. The federal CARES Act allocates a total $158 million to Georgia colleges, with restrictions on most funds to address costs related to instructional changes due to the coronavirus pandemic.

10 Percent Cut is Sharpest One-Year Drop in University System History State Funds and Enrollment for University System of Georgia, 2008-2021

Source: Georgia’s AFY budgets 2001-2020; Georgia’s FY 2021 Budget (HB 793); Board of Regents, University System of Georgia, fall semester enrollment reports 2001-2019, GBPI estimate of fall 2021 enrollment assuming 1 percent growth. Adjusted for inflation.

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Technical College System of Georgia

Education

The 2021 state budget for the technical college system is $334 million. About $298 million is allocated to technical colleges. The rest goes to services administered under the technical college system like Adult Education for those without a high school diploma and customized workforce training for businesses.

The budget represents a 10 percent cut, or $36 million less for technical colleges and $4 million in cuts for administration and other programs.

The technical college system includes 22 colleges in Georgia that provide associate degree, certificate and diploma programs. It is also the state’s largest provider of Dual Enrollment courses for high school students. Technical college enrollment often fluctuates with the economy, as people who cannot find work enroll in technical education to learn new skills.

The federal CARES Act provides an additional $37 million for technical colleges, with restrictions on most funds to address costs related to instructional changes due to the coronavirus pandemic.

Budget Cuts Set Technical College Funding Back

State Funds and Enrollment for Technical College System of Georgia, 2008-2021

Note: AFY 2019 includes $35 million for a new Aviation Academy at the Paulding Northwest Atlanta Airport.

Source: Georgia’s AFY Budgets 2006-2020; Georgia’s FY 2021 Budget (HB 793); State general funds for technical education only. Technical College System of Georgia, End of Year annual Academic Year Enrollment Reports. GBPI estimate of 2019 and 2020 enrollment assuming 1 percent growth. Adjusted for inflation.

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2021 Georgia Budget Primer

Lottery Funds: Support for Pre-K and College Students The 2021 budget cuts administrative costs but maintains awards funding for HOPE scholarships, grants and pre-K classrooms.

Georgia appropriated $1.4 billion from lottery sales to fund and administer the following education programs. $821 million

HOPE Grants For students pursuing certificates or diplomas in technical colleges. These funds include the partialtuition HOPE Grant, full-tuition Zell Miller Grant and supplemental HOPE Career Grant, which covers full tuition for students in specific programs when combined with other HOPE grants.

$66 million

Education

HOPE Scholarships For students pursuing bachelor’s or associate degrees. These funds include the partial-tuition HOPE Scholarship and the full-tuition Zell Miller Scholarship.

HOPE GED Grants $421,667 One-time awards for students who complete a GED and enroll in postsecondary education.

Student Access Loans Provide low-interest loans to college students.

$26 million

Pre-Kindergarten For 4-year-olds to access high-quality early learning.

$379 million

More than 170,000 students receive a lottery-funded scholarship, and 5,500 have lottery-funded loans. About 80,000 children enroll in Georgia pre-K; more than 4,000 children are on waiting lists.

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Lottery Reserves Protect HOPE and Pre-K

Education

Every year, unspent lottery dollars transfer to reserves managed by the State Treasury. At the end of the 2019 fiscal year, about $79 million in surplus transferred to the lottery reserves.

Since 2011, state law requires the lottery shortfall reserve to hold an amount equal to 50 percent of the previous year’s net lottery proceeds. If lottery ticket sales underperform, the state can draw on this reserve to fund HOPE. After reaching the 50 percent target, additional reserves are considered unrestricted.

Total Lottery Reserves Top $1.2 Billion

Source: State Accounting Office, 2014-2019 Georgia Revenues and Reserves Reports, 2011-2013 Selected Summary Financial Information.

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Georgia’s 2021 Health Care Budget

Health Care

Three state agencies are primarily responsible for health care services in Georgia: the Departments of Community Health, Public Health and Behavioral Health and Developmental Disabilities.

State funding for these three agencies totals $5.2 billion for 2021, or about 20 percent of state general spending. General Fund appropriations for these agencies account for $4.4 billion, or 86 percent of the total, while other sources account for about $725 million. General Fund dollars for these three agencies decreased by $1.4 million from 2020 to 2021.

The Department of Community Health accounts for $3.4 billion or 71 percent of total state spending on health care. It operates Georgia’s Medicaid and PeachCare programs, conducts some planning and regulatory functions and administers the State Health Benefit Plan that provides health care to state employees and teachers. Funding for the state health plan comes from school districts, state agencies and their employees and retirees.

Georgia plans to spend about $1.1 billion, or 22 percent of Georgia’s 2021 health care expense, on behavioral health and developmental disabilities. This includes some services funded through Medicaid.

The Department of Public Health operates a variety of populationbased programs such as immunizations, health screenings and infectious disease control. It receives $284 million, or about 5 percent of Georgia’s 2021 health spending.

Health Spending by Agency

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by the governor.

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2021 Georgia Budget Primer

Medicaid and PeachCare Enrollment and Spending Medicaid and PeachCare serve about two million Georgians, or one in five residents. The programs are important sources of health coverage for children, pregnant women, low-income seniors and people with physical and developmental disabilities.

Medicaid and PeachCare cover about 1.25 million children, or nearly half of all children in Georgia. Medicaid also pays for more than half of all births in Georgia. PeachCare is a separate program serving children from families with incomes above the Medicaid threshold, but who often lack access to employer-sponsored coverage. PeachCare is mostly funded by the federal Children’s Health Insurance Program (CHIP).

Health Care

Medicaid is the main source of health coverage for Georgians with long-term health care needs, both in nursing homes and in community-based settings. Medicaid is the primary payer for three-fourths of nursing home patients in Georgia. Medicaid also helps pay Medicare premiums for more than 170,000 older Georgians.

Low-Income Medicaid serves children, pregnant women and some parents with very low incomes. The Aged, Blind and Disabled portion of the program serves the elderly and people with a qualifying disability. Most Medicaid enrollees qualify through the low-income program, but most of the spending is for elderly and disabled patients.

Bulk of Medicaid Spending is for Children, Seniors and People with Disabilities

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by the governor.

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Georgia’s Medicaid Investment Ranks Near Bottom

Health Care

Georgia expects to spend $3.4 billion in state funds to serve the two million Georgians covered by Medicaid and PeachCare, a modest amount by national standards. Georgia’s spending per Medicaid enrollee ranked fifth lowest among the states, coming in at 32 percent below the national average in 2015, the most recent year with data available. Georgia ranked last in Medicaid spending per low-income resident in 2017.

Georgia’s rank by both measures illustrates the health and economic realities faced by much of its population. The state scores comparatively low in national health assessments. The uninsured rate in Georgia is the third-highest in the country, and Georgia ranked No. 11 out of all states for poverty rates in 2018, with an overall poverty rate of 14 percent and a child poverty rate of 20 percent.

A greater investment in Medicaid can allow the state to expand health services and increase the rates of reimbursement for health care providers. There was a 1 percent primary care rate increase in the 2021 budget, but the last significant increase in reimbursement for primary care and OB/GYN doctors was in the 2018 budget when lawmakers increased rates to 2014 Medicare levels.

Georgia Medicaid Spending Per Person Ranks Low

Source: Kaiser Family Foundation.

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2021 Georgia Budget Primer

Inequities in Health Care Access In addition to the COVID-19 pandemic, Georgia has several health care challenges to address, such as the third highest uninsured rate in the nation, rural hospital financial strains, health care worker shortages and rising health care costs.

Black and Latinx Georgians face worse outcomes for many of these measures. Black women are three to four times more likely to die from pregnancy-related causes. The uninsured rate for Latinx Georgians is over 2.5 times higher than for white Georgians. These differences are the result of structural racism, showing the need for Georgia leaders to treat racism as a public health crisis and pursue solutions to undo these inequities.

Health Care

The 2021 budget takes an important step to increase access to care and address maternal mortality disparities by including $20 million to allow new mothers to keep their Medicaid coverage for six months postpartum, rather than the two months previously allowed. This plan needs to be approved by the federal government. Georgia can also increase health care access by expanding Medicaid coverage to over half a million Georgians, with 90 percent of the costs funded by the federal government.

Rural Georgia counties, especially in southwest Georgia where many of the counties populations are largely Black, have higher uninsured rates and faced a higher proportion of COVID-19 cases and deaths. Rural residents and hospitals stand to benefit the most from expanding health coverage.

Rural Georgia Faces High Uninsured Rates Percent of uninsured Georgians under the age of 65:

Source: 2017 United States Census Data.

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Behavioral Health and Developmental Disabilities

Health Care

The Department of Behavioral Health and Developmental Disabilities (DBHDD) operates a variety of programs that serve Georgians with mental health needs, addiction and developmental disabilities. The department also operates programs for forensic evaluation and treatment for Georgians under court jurisdiction.

DBHDD receives more than $1.1 billion in 2021 from the General Fund along with $10.3 million in Tobacco Funds, a combined decrease of $91.4 million compared to 2020.

Georgia entered into a legal settlement in 2010 with the U.S. Department of Justice that laid out a plan for the state to increase its mental health and developmental disability services in home or community settings relative to institutions. The state invested over $256 million new state dollars since 2011, including supportive housing for people moving out of institutions, strengthening the behavioral crisis response system and adding new communitybased behavioral health services.

Mental Health, Developmental Disabilities More Than Two-Thirds of DBHDD Budget

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by the governor.

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2021 Georgia Budget Primer

Public Health The Department of Public Health operates a variety of programs focused on health promotion, disease prevention and healthrelated disaster response and preparedness. The department receives $269 million from the General Fund and $13.7 million in Tobacco Settlement money in 2021. The Trauma Care Network Commission, which is included in the department’s budget, receives $14.4 million from the General Fund in 2021. The largest state-funded programs provide financial assistance to county health departments, aim to prevent the spread of infectious disease and provide treatment and health promotion services aimed at children and infants. The department’s 2021 budget decreased by $8.2 million compared to 2020.

Health Care

Georgia’s public health programs also receive significant federal support. Federal money accounts for 57 percent of the department’s $690 million budget in 2021, while state funding accounts for the rest. The federally funded Special Supplemental Nutrition Program for Women, Infants and Children, also known as WIC, makes up almost half of the department’s federal funds.

Much of Public Health Funding Flows to County Health Departments

Source: Georgia’s 2021 Fiscal Year Budget (HB 793), signed by the governor..

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Georgia Health Agencies Respond to COVID-19 Public Health Emergency

Health Care

Governor Kemp declared Georgia’s first public health state of emergency on March 14, 2020. The amended 2020 budget that passed in March included $100 million from the state’s Revenue Shortfall Reserve to help the Georgia Emergency Management Agency (GEMA) and the Department of Public Health (DPH) in their COVID-19 response efforts. GEMA also received $54.5 million from the Governor’s Emergency Fund in its work to build treatment and testing capacity and distribute supplies to hospitals and health departments.

DPH and GEMA are leading the state’s response to the COVID-19 public health emergency and are tasked with preventing the spread of the virus. DPH aimed to hire nearly 1,000 contact tracers to assist in identifying and mitigating hotspots of the virus. DPH has also responded with additional services such as a COVID-19 Hotline for individuals to access health care if they suspect they are infected, an online monitoring tool and a state data dashboard to track the virus.

The Department of Community Health (DCH) is also helping with the response through changes to Medicaid. The agency submitted federal waivers to ease health care provider enrollment in Medicaid, expand the use of telehealth services and not require current enrollees to renew coverage or pay copayments during the emergency period. The department is also responsible for the oversight of nursing homes and is utilizing existing funds to track COVID-19 cases and deaths and study the impact of COVID-19 on the financial viability of these facilities. The Department of Behavioral Health and Disabilities (DBHDD) is tracking COVID-19 cases in the state’s five psychiatric hospitals.

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2021 Georgia Budget Primer

New Federal Health Funding for COVID-19 Public Health Emergency Federal legislation in response to the COVID-19 national emergency allocated funds to states for several priorities such as education, unemployment insurance and health and human services. The health funding included money directly for hospitals and clinics and funding for the state’s health agencies. Some of the new federal funding for health agencies is outlined below.

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Health Care

Notes

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Georgia’s 2021 Human Services Budget The $796 million FY 2021 budget for the Department of Human Services reduces spending to protect the safety of Georgia’s most vulnerable children and families by $34 million. The Department was not spared from COVID-19’s effect on the state budget.

The largest share of state funding for the agency will remain in child welfare and foster care related services in FY 2021.

The Division of Family and Children Services’ efforts to protect vulnerable children account for about 60 percent of the agency’s overall budget.

The state invests state dollars to maintain eligibility staff for federal low-income assistance programs such as Medicaid, the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Smaller yet vital programs such as vocational training for adults with disabilities and elder protection services account for the remaining funds.

Cuts to Georgia Human Services Budget for FY 2021

Source: Georgia’s 2021 Fiscal Year Budget (HB 796), signed by the governor.

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2021 Georgia Budget Primer

Child Welfare and Foster Care Georgia will spend a combined $516 million on Child Welfare, Foster Care and Adoption Services in FY 2021. Addressing the needs of Georgia’s youth in foster care and investigating the abuse of children remains a top priority for the Department of Human Services despite the call to reduce spending.

Child welfare funding will fall by 3 percent by scaling back contracts to community-based providers of educational services for children in state custody, reducing travel and eliminating vacant positions. The budget also eliminates an outdated child abuse registry, which has been replaced by the state’s SHINES database and allows caseworkers to investigate reports of child abuse in a timely manner.

Modest reductions to foster care will occur naturally as a result of more youth exiting the foster care system.

Human Services

More Children are Exiting Georgia’s Foster Care System Children in Georgia’s Foster Care System, 2018-2020

Source: Georgia Division of Family and Children Services.

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COVID-19 and Georgia’s Unemployment Rates

Human Services

The COVID-19 pandemic exacerbated economic hardship in Georgia. In just four months, claims for unemployment benefits soared to more than two million, wiping out all gains made since the Great Recession. Prior to the pandemic, Georgians in many pockets of the state were already struggling with unemployment, jobs offering low wages and fewer hours than they are willing to work or simply a scarcity of quality job opportunities. Moreover, Georgians of color and women were disproportionately represented in jobs that fail to offer economic mobility.

The COVID-19 crisis has exposed the insufficiency of the landscape of support for low-income Georgians. Unemployment rates have skyrocketed in many counties. These challenges lead to greater demand for safety net support, which would normally require that the agency add additional case workers to administer benefits and help individuals find work that pays family-supporting wages.

Unemployment filing trends across race during COVID-19 have begun to run parallel to those of the Great Recession: Black and Latinx workers have been consistently overrepresented among unemployment claimants. As Georgia reopens segments of the economy and workers are called back to work, Black and Latinx workers are already showing signs of slower recovery.

Economic Recovery is Already Proving to be Slowest for Black and Latinx Georgians

Change in unemployment claims by race from May 2020 to June 2020 in Georgia

Source: U.S. Department of Labor, Employment and Training Administration.

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2021 Georgia Budget Primer

Unemployment by County, May 2019 Unemployment Level: 0% - 3% 4% - 6% 7% - 9% 10% - 14%

Human Services

Unemployment by County, May 2020

Unemployment Level: 0% - 3% 4% - 6% 7% - 9% 10% - 14%

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Cuts to the Safety Net Will Worsen Economic Hardship

Human Services

The FY 2021 budget reduces safety net spending from $121 million to $115 million. The $6 million cut affected funds that help to pay the salaries of hundreds of state employees who administer federal safety net programs that provide a base level of support for people until they get back on their feet. The funds are also used to contract with community-based organizations that help people with low incomes enroll in public assistance and access job training opportunities.

Unlike child welfare and foster care, low income support programs administered by the Department depend overwhelmingly on federal dollars. However, state funds support the systems that make access to those federally-funded programs possible, and Georgia cuts those state funds. For example, the budget reduces funding for Georgia Gateway, the state’s online eligibility system and also cuts funding for community partnerships that help people with low incomes find employment, a requirement of Georgia’s Temporary Assistance for Needy Families Program (TANF).

Finally, Georgia cuts funding for direct cash assistance as well, and has, since the Great Recession, used federal TANF funds to supplant state funds in child welfare and foster care.

Georgia’s Administration of Food Assistance, Cash Aid and More Dependent on Federal Funds

Source: GBPI analysis of signed budgets, 2009-2021.

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2021 Georgia Budget Primer

Child Care The Department of Early Care and Learning provides access to affordable child care for working families with low incomes.

Parents who receive child care subsidies experience fewer work disruptions, stay employed longer and enjoy higher family earnings.

The FY 2021 budget reduces spending by $7 million for the Quality Rated Subsidy Grants offered to providers, which create child care slots for families with low incomes. This will impact about 2,000-3,000 slots; however, the agency will allow the impacted families to convert to a traditional Childcare and Parent Services (CAPS) scholarship using existing federal funds. This is intended to mitigate families losing access to affordable child care.

As of July, 40 percent of child care providers have closed due to the COVID-19 pandemic with many not expected to reopen.

Human Services

The annual cost of child care for two children in Georgia was about $15,000 in 2018. Child care expenses can consume more than half of a low-income family’s budget. The state’s child care assistance program serves about 50,000 children per week, but it is likely more than 364,000 income-eligible children in low-income working families need it. More funding is needed to ensure all Georgia parents can afford high-quality child care and parents are not left behind in the state’s economic recovery.

Child Care Costs are More than Half of Low-Income Family Budgets

Source: GBPI analysis of U.S. Census Bureau and Child Care Aware of America data.

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Human Services

Notes

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Georgia’s 2021 Department of Corrections Budget The Georgia Department of Corrections (GDC) budget for 2021 is $1.1 billion. The department oversees all aspects of the state’s prison system, including contracts carried out by private prisons.

Corrections officers make up most of the department’s workforce.

Criminal Legal System

Recent reform efforts focused on saving costs related to housing inmates and improving re-entry outcomes. Since 2012, several major reform bills have been enacted that address issues related to prison length of stay, mandatory minimum sentencing and probation and parole eligibility.

When the reforms began in 2012, the state’s prison population was 54,895. By 2015, the poulation had only decreased to 53,870.

As of 2019, it had risen to 55,047. Notably, the prison population has seen substantial declines in 2020 that can be partially credited to measures that have been taken in response to COVID-19. With the increase in early releases and decline in crime and arrest rates since the pandemic started, the prison population as of July 1, 2020 was 51,219. Although the department’s budget has grown over the last few years, the state’s revenue shortfalls resulted in mandated cuts that decreased the GDC budget by seven percent, or $82.9 million, for FY 2021.

Majority of Department of Corrections Budget Spent on State Prisons

Source: Georgia’s 2020 Fiscal Year Budget (HB 739).

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2021 Georgia Budget Primer

The Cost of Correctional Control on the Rise Correctional control, as defined by the Prison Policy Initiative, includes individuals who are in State Prison, Federal Prison, Local Jail, Youth Confinement, Involuntary Commitment, Indian Country Jail or are under probation or parole. The Department of Community Supervision (DCS) reports that one in 13 adults are on felony probation in Georgia.

The 2021 budget allocates $166 million to DCS. The state created this agency in 2015 to take over major re-entry initiatives and oversee the state’s probationers, sentenced to court-imposed community supervision in lieu of incarceration. Probation, now referred to in the budget as Field Services, accounts for almost 92 percent ($152 million) of the DCS budget. The state’s probation budget has nearly doubled since 2012.

In 2019, DCS supervised over 265,816 people. For every 100,000 Georgians, 3,943 of those are on probation. This is double the rate in Texas and four times the rate in North Carolina, making Georgia the No. 1 state in the nation for the number of individuals under community supervision.

Criminal Legal System

Georgia Has the Highest Number of Individuals Under Correctional Control Because of Probation Number of People on Probation in Georgia, 2012-2019

Source: Georgia Department of Community Supervision 2019 Annual Report.

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Looking Ahead Georgia’s 2021 budget includes steep cuts to services and programs across the board, including health, education and programs that provide financial support to families with low incomes. Every Georgian will see the effects of these cuts, but people of color and rural Georgians will feel them most acutely.

Education and health investments account for more than half of state spending, year after year. That holds true again for Georgia’s $25 billion 2021 budget. Still, many of Georgia’s 181 school districts will struggle to balance the books as the state cuts nearly $1 billion in funding for public education. Georgians who seek mental health services, substance abuse support or access to health services in rural areas will also be disproportionately affected by these cuts.

During the 2021 General Assembly, lawmakers can pursue commonsense opportunities to help restore funds meant to flow to Georgians’ needs. They can raise revenues by eliminating the “double deduction,” a loophole that only benefits Georgia’s top earners; lift the tobacco tax from 37 cents to the national average and trim back special-interest tax breaks that do not deliver on their promise. They can embrace full Medicaid expansion to give health coverage to hundreds of thousands more Georgians while drawing down federal funds. And, once our budget is restored, they can work to ensure it adequately reflects our state’s values by addressing racial disparities, modernizing the school funding formula, supporting Georgia workers and boosting health outcomes.

This future can be realized. It all comes down to revenues raised and budgeting priorities. The prosperity of 10.6 million Georgians is riding on it.

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2021 Georgia Budget Primer

Contact Us The Georgia Budget and Policy Institute 50 Hurt Plaza SE, Suite 720 Atlanta, Georgia 30303 www.gbpi.org | 404.420.1324 GBPI Leadership Team Taifa Smith Butler, President and CEO, tbutler@gbpi.org Jennifer Owens, Senior Vice President GBPI Research Team David Schaefer, Research Director, dschaefer@gbpi.org Stephanie Angel, Policy Fellow for Immigration and Criminal Justice, sangel@gbpi.org Alex Camardelle, Senior Policy Analyst for Economic Mobility, acamardelle@gbpi.org Laura Harker, Senior Policy Analyst for Health Care, lharker@gbpi.org Danny Kanso, Policy Analyst for Budget and Taxes, dkanso@gbpi.org Ray Khalfani, Research Associate, rkhalfani@gbpi.org Jennifer Lee, Senior Policy Analyst for Higher Education, jlee@gbpi.org Stephen Owens, Senior Policy Analyst for K-12 Education, sowens@gbpi.org Press Inquiries Caitlin Highland, Communications Director, chighland@gbpi.org Also contributing to the success of the 2021 Budget Primer: Jennifer Crane, Lindsey Garland, Amanda Hollowell, Crystal Johnson, Jyll Walsh, Alex Welch, Jessica Woods. gbpi.org | 61