Current News

/

ArcaMax

From nearly zero to $16 billion: How the state of Georgia's reserves surged

James Salzer, The Atlanta Journal-Constitution on

Published in News & Features

About this time 13 years ago the state had enough money in reserves to pay for schools, roads, policing, prisons, courts and all the other things the government does.

For a couple of days.

The Great Recession had siphoned its saving account, even after deep spending cuts across the whole of state government whittled agency budgets.

Fast-forward to the new state government of the post-coronavirus-pandemic-shutdown era that this fall reported having $16 billion in two reserves, which is about half a year’s worth of the state budget.

The remarkable turnaround started with an economic recovery in the 2010s, with then-Gov. Nathan Deal holding the line on spending and slowly using surpluses to rebuild the account the state holds money in for the next recession, when it might be needed to keep the government running.

But that growth in reserves greatly accelerated after the post-COVID-19 reopening of the economy in April and May of 2020, as massive federal spending, higher wages, inflation, state policy changes and other factors brought an avalanche of tax revenue like the state of Georgia has never seen before.

 

“The big thing is, look at 2021 and 2022,” said Richard Dunn, the director of the Office of Planning and Budget. “Typically, we are used to seeing 3 1/2, 4% growth. In those years it went up 13% and 23%.”

Combine that with the fact that “nobody knew what was going to happen coming out of the pandemic,” Dunn said, so Gov. Brian Kemp and lawmakers budgeted relatively conservatively and didn’t spend much of that tax money coming in.

That meant the state ran a $3.7 billion surplus in fiscal 2021 and a $6.6 billion surplus in fiscal 2022, and in October, it reported a $5.3 billion surplus for the fiscal year that ended June 30.

That has allowed Kemp and lawmakers to rebate $3 billion to taxpayers, hike salaries of teachers and state employees, improve technology in the government and boost spending in everything from education and public health programs to prisons, policing and road construction.

...continued

swipe to next page

©2023 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.

Comments

blog comments powered by Disqus