By Mike Klein
Georgia’s rainy day fund – Revenue Shortfall Reserve in government speak – could approach the $1 billion mark this year – a long way back from where the account found itself during recession when rainy day funds paid real bills and nearly exhausted the state’s operating surplus. The high water mark was $1.544 billion in Fiscal 2007.
Georgia’s reserve account took a shocking almost $1 billion hit from Fiscal 2007 – 2008 which coincided with the second recession of the decade. Most economists generally place the second recession as early 2008 through mid-2009 and the federal government maintains the economy has been in an upturn for almost five years, albeit a slow upturn.
Governor Sonny Perdue’s administration had $1.544 billion in state reserves before recession caused mandatory budget cuts, hiring freezes and in some locations, state employee layoffs. Those prudent measures did not safeguard state reserves enough however as available cash dropped to $565.9 billion in Fiscal 2008 and then took another plunge to about $103.7 billion one year later.
Governor Nathan Deal has added $600 million since his 2011 inauguration. The fund held $717.3 million when Fiscal Year 2013 ended last June. Last year alone the administration added $360 million. This helped the state retain its AAA credit rating. Governor’s Office spokesman Brian Robinson said the next decision on whether and by how much to increase the fund balance again will be made in November.
One other financial footnote: State government general fund revenue from taxes and all other sources continues to climb. Year-to-date state revenue for the first nine months of Fiscal 2014 was up $705 million or 5.7 percent through March.
(Annual Totals Shown in Millions of Dollars Unless Noted Below)
1976 $30.00M 1981 $93.28M 1986 $150.62M
1977 $57.77M 1982 $637,376 1987 $162.63M
1978 $66.54M 1983 $0 1988 $176.72M
1979 $75.22M 1984 $38.24M 1989 $194.0M
1980 $84.29M 1985 $138.23M 1990 $0
1991 $0 1996 $313.38M 2001 $734.44M
1992 $0 1997 $334.94M 2002 $700.27M
1993 $122.64M 1998 $351.54M 2003 $260.60M
1994 $267.19M 1999 $380.88M 2004 $51.57M
1995 $288.76M 2000 $555.27M 2005 $256.66M
2006 $792.49M 2011 $328.38M
2007 $1.544.59M 2012 $377.97M
2008 $565.90M 2013 $717.32M
(Note: 1982 Shown in Hundreds of Thousands of Dollars)
(Source: Governor’s Office of Planning and Budget)
I wanted to publicly say how much I appreciate Georgia Public Policy Foundation. For those of you that will be entering the Legislature or are relatively new you may not quite yet appreciate how much we rely on Georgia Public Policy Foundation’s research and work. As you know we’re a citizen’s legislature. We have very little staff. They have been an invaluable, invaluable resource to us. To put this [Forum] on and the regular programs that they do throughout the year make us better at what we do. (At the 2012 Georgia Legislative Policy Forum.)