State Rep. Terry England is no stranger to shepherding deep budget cuts through his powerful House Appropriations Committee.
England’s nine-year tenure as chairman of the budget committee began during the midst of a recession that spurred the slashing of state agencies’ budgets. Now, despite steady economic growth in the Peach State, Gov. Brian Kemp this month ordered department heads and state agencies to reduce their budgets by 4% from the $27.5 billion budget year that started July 1 and 6% from that level in next year’s budget. It is England’s committee and his chamber that launch the state’s spending plan each legislative session.
State department and agency leaders are under orders to submit their proposals to the Governor’s Office of Planning & Budget in early September. Soon after, England and his Senate counterpart will get a first glance at those requests while Kemp’s office works on presenting his proposed budget in early January.
The Georgia Recorder interviewed England at his Auburn office where he runs his agribusiness.The office is in an outbuilding in the backyard of his ranch-style home in rural Auburn, a city that borders Gwinnett and Barrow counties.
England detailed the tough budget choices department heads are weighing, as less than 20% of state spending is even considered discretionary.
Below are excerpts from the conversation with the Republican, edited for clarity and brevity.
Is this the right time to make cuts to the state budget, especially since revenues have been up in recent years?
I think all the time is a good time to look for cuts and that has been our practice pretty much. It is how we have managed to keep our per capita spending low.
For the agencies themselves, it is probably good every so often to look at deep cuts as an exercise just to be ready for a downturn. My only concern is that in doing so, especially as lean as we have kept agencies since the recovery, that it may draw critical resources away from everyday services.
What’s next for state budget leaders and how does Kemp’s reduction requests compare to the past?
In the depths of recession Gov. (Sonny) Perdue was asking for 6 to 10% cut plans. As the recession starting easing off that kind of became 2 to 6% or 4 to 8% scenarios.
We’re waiting right now to see what (Office of Budget and Planning) are exempting from the cut requests. I would assume that K-12 education (Quality Basic Education) funding would be exempt. I assume probably Medicaid for our biggest portion would be exempt as well as the instructional formula in higher education. Again, that’s purely speculation on my part. It’s those things that are formula-driven where there’s really no way to cut without really reeling things back that benefit the state consumer.
In our budget somewhere between 82 to 84% is basically formula-driven spending, meaning 16 to 18% is discretionary spending.
What are some of the challenges the state will deal with next year with some of the formula-driven expenses?
It’s stuff that you can’t just tell people don’t show up. The Medicaid population, if they meet eligibility, then they qualify. You can’t tell them ‘you meet eligibility, but sorry today we’re out of money.’ You’ve got to take care of their health care needs.
You have to take care of those that show up. Those formula driven things are based on that.
But then there’s discretionary spending. It’s state troopers, it’s prison guards, it’s all of those things we think about as necessities of keeping law, peace and order. We can’t really say we’re not going to put troopers on the road or not put guards in prisons to watch the inmates.
That 17% shrinks again to those things that people think are truly discretionary: money for arts or keeping state parks open. Or even something as simple as the drivers license renewal center being open at an hour you can get to based around your work schedule.It starts really getting tough to figure out. We came through the recession doing an awful amount of right sizing.
Our departments and agencies have been efficient with Gov. (Nathan Deal) and now Gov. Kemp, who have been very mindful of spending.
The budget amounts have gone up annually in recent years, yet spending per person remains low. Have the budget increases just been a correlation to the population increase and inflation?
There are more folks in need of services, more kids in schools, more folks needing Medicaid. Our prison population has been relatively flat with prison reform, we’ve actually seen an overall reduction in correctional spending.
You have some things that due to changes we have curbed those costs, but you’re sitting here with a state with somewhere between 1.1 to 1.5 million more people.
Gov. Kemp has $2,000 left to meet his pledge for $5,000 raises for educators. How big is the challenge to meet those costs as well as add more spending on Medicaid?
I know that their intention and goal is to try to come up with the $2,000. We have another piece of the income tax reduction as well. We voted two years ago to go from 6% to 5.75%. This coming session on the agenda is to go from 5.75% to 5.5%. Those are not cheap things to do. Income tax is by far the largest revenue for the state. Basically when you look at the revenue generated by income tax, that’s usually within a few million dollars of what we spend on K-12 education alone.
We’re trying to figure out what the happy spot is on Medicaid and on the waiver. For an all out expansion, the number we worked out for years is about $250 million a year in state costs, which would be 10 percent of what the total would be (federally). I know what the governor and our folks are looking at is trying to figure out how do we help those that truly need it and is there a further way to taper benefits.