You have reached your limit of free articles this month.

Enjoy unlimited access to

Starting at just 99¢ for 8 weeks.


  • ePAPER

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks


Welcome to

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on

Georgia’s budget reserves swell to record $2.05 billion

Gov. Nathan Deal’s goal of leaving his successor flush with $2 billion in the state’s savings account is way ahead of schedule, thanks to a strong economy and relatively tight spending plans.

A fiscal 2016 end-of-the-year report shows the state’s preliminary shortfall reserves at a record $2.05 billion. That’s up about 43 percent from the end of 2015.

The fiscal year ended June 30.

Reserves will drop a bit early next year when the state doles out money to fund increases in k-12 school enrollment, but it still marks a milestone for a governor determined to leave the state in much better financial shape when he retires in 2019 than it was when he took office after the Great Recession.

“It’s not politically very exciting,” said Kelly McCutchen, the president of the conservative Georgia Public Policy Foundation. “It’s like maintenance. If any Republican is in a tight race this fall, they are not going to run ads on the fact that there is a $2 billion state reserve. But it’s good fiscal management.”

Senate Appropriations Chairman Jack Hill, R-Reidsville, said while he’d like to see the state savings account continue to grow because the money can go quickly in an emergency, the current size of the reserves has some significance.

“You have to give the governor a lot of credit because there is always pressure to spend money and give pay raises,” Hill said, “but he has always been steadfast about building the reserves.”

State reserves are important for many reasons. High on the list is the fact that they help fund the essentials of state government — paying thousands of teachers, prison guards and state patrolmen, for instance — during recessions.

State reserves fell to $51 million in 2004 when Georgia’s government was going through a fiscal recession, climbed to $1.54 billion in 2007, then dropped back down to $103 million during the Great Recession.

That may sound like a lot of money, but it costs about $91 million a day to run state government. So during the Great Recession, the state had about a day’s worth of money in the bank.

Big reserves also are important in helping the state keep its AAA bond rating, which allows the government to borrow money at low interest rates. That saves the state millions of dollars a year in interest payments.

The good bond rating is particularly important because the state is in the midst of a spree of road-building and other construction projects. Lawmakers approved a record construction budget during the 2016 session.

The skyrocketing reserves are due largely to Deal and his staff making purposefully conservative estimates about how much tax money will be collected. Legislators can only budget to spend what the governor estimates the state will take in. The state collected a record amount of taxes in the past fiscal year, far above what the government spent.

Even with the record tax take, Deal’s budget director, Teresa MacCartney, sent out a memo to state agencies telling officials not to ask for an increase in their budgets next year.

Some extra spending is guaranteed. Schools will get a boost. The state Medicaid agency has already said it needs an extra $300 million. Deal announced Thursday plans to give state law enforcement officers a 20 percent raise.

In addition, the governor wants to change the formula for funding k-12 schools, which could cost money, and he wants to build an expensive state courts building down the street from the Capitol.

There will be other calls to increase spending as well, particularly after budgets were deeply cut during the Great Recession. The Atlanta Journal-Constitution reported in June that many state agencies still spend less per capita today than they did before the recession when inflation and population growth are taken into account.

And Hill expects continued calls to “give money back to taxpayers” by cutting taxes.

Deal’s ability to meet his goal of socking away $2 billion in the state’s savings account two years before he leaves office may only make those voices louder.

“Now that it’s been hit, we’re back to the usual tug and pull of tax cuts or spending increases,” McCutchen said.

McCutchen has been among those calling for reducing the state’s income tax rates. When asked whether the $2 billion state reserves will be used as part of his argument during the 2017 General Assembly session, he responded, “We’re constantly looking for opportunities to reform the tax code.”

Reader Comments ...

Next Up in Georgia Politics

Perdue confirmation hearing may be easier than for other Trump picks
Perdue confirmation hearing may be easier than for other Trump picks

Former Gov. Sonny Perdue’s confirmation hearing before the Senate Agriculture Committee on Thursday may be best understood by contrasting it with the experience of another Georgia Republican tapped to serve in President Donald Trump’s Cabinet, Health and Human Services Secretary Tom Price. Price’s two turns before the Senate this...
Income tax among number of proposals reworked by Georgia Senate panel
Income tax among number of proposals reworked by Georgia Senate panel

A key Senate committee completed a two-day taxapalooza Wednesday by voting to cut the top state income tax rate, clarify that e-retailers must collect sales taxes for online purchases by Georgians, and eliminate sales taxes on taxi and limo rides. The House had pushed to tax ride-share transportation from companies such as Uber, but the panel rejected...
Georgia Senate leaders support income tax cut, e-tax collections
Georgia Senate leaders support income tax cut, e-tax collections

A key Senate committee backed a cut in the top state income tax rate Wednesday while also supporting legislation to force e-retailers to collect sales taxes for online purchases by Georgians. The Georgia House earlier approved House Bill 329 by House Ways & Means Chairman Jay Powell, R-Camilla, which would have dropped the top tax rate from 6 percent...
Georgia Legislature approves budget, giving teachers 2 percent raises
Georgia Legislature approves budget, giving teachers 2 percent raises

The General Assembly overwhelmingly approved a record new state budget Wednesday, paving the way for lawmakers to close out the 2017 legislative session. The budget now goes to Gov. Nathan Deal for his signature. House Speaker David Ralston, R-Blue Ridge, said the budget deal was struck in fewer legislative working days than during any session in recent...
Georgia Senate backs effort to curtail the overprescribing of opioids
Georgia Senate backs effort to curtail the overprescribing of opioids

A measure requiring doctors to log into a pill-tracking database before prescribing painkillers and other high-risk drugs won unanimously approval Wednesday from the Georgia Senate, as supporters have said the effort would help curtail the overprescribing of opioids. House Bill 249, sponsored by state Rep. Kevin Tanner, R-Dawsonville, comes as...
More Stories