Kids Count Tour Budget and Taxes

1
Kids Count TourBudget and Taxes

• Alan Essig, Executive Director
• Georgia Budget and Policy Institute
• October 17, 2006

2
Taxes and the Budget
Over 75 of the state budget is spent on
education, healthcare, and criminal justice.
These three areas drive the state budget and are
increasing both in cost and population faster
than overall inflation and population growth.
3
Existing and Emerging Needs

• Georgia is the 9th largest and 5th fastest
  growing state.
• Populations served by state government programs
  are growing faster than overall population.
• Overall population growth 1990-2005 39
• Medicaid population growth 1990-2005 126
• Prison population growth 1990-2005 153
• There are existing education, healthcare,
  transportation, and other service demands, as
  well as the emerging needs of our growing
  population.

4
Linking Taxes and the Budget

• Georgia needs a tax system that fairly raises
  sufficient revenues to meet the education,
  healthcare, criminal justice, environmental, and
  transportation needs of a modern, growing 21st
  century state.

5
Adequacy of Funds

• Georgians are paying less in state taxes as a
  percent of income.

6
Fairness of Tax System

• Georgia has a regressive tax system.

7
Budget Outlook For FY 2008

• 5 to 7 revenue increase equals 935 million to
  1.3 Billion.
• Education (formula growth) 333 Million
• Salary Increase (3) 270 Million
• Medicaid and Peachcare 336 Million
• State Health Benefit Plan 215 Million
• Corrections 77 Million
• 1.23 Billion

8
Budget Outlook FY 2008 and Beyond

• Continued Federal Budget Cuts
• Continued Population Growth and Demographic
  Changes
• Education
• Healthcare
• Transportation
• Actual and Potential Lawsuits
• School Funding
• Child Welfare

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Tax Cut Culture But at What Cost?

• Potential tax cuts
• Property tax caps
• Eliminate ad valorem tax on cars
• Eliminate or further reduce corporate income tax
• Eliminate income tax on seniors
• Additional sales tax exemptions
• TABOR Limits on growth of state and local
  revenue growth
• House and Senate Study committees

10
Policy Solutions

• Commission for a New Georgia
• Update business practices
• Efficiency and effectiveness
• Budget and Management Reform
• Program budgeting
• Transparency and High Performance

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Policy Solutions

• Comprehensive Tax Reform and Modernization
• Solidify tax base (Relevant to 21st century
  economy)
• Raise sufficient revenues
• Withstand downturns
• Fair and equitable state tax system
• Targeted tax cuts

12
Example AComprehensive Tax Reform
13
Example BComprehensive Tax Reform
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Contact Info

• Alan Essig
• 100 Edgewood Ave
• Suite 1040
• Atlanta, GA 30303
• 404-420-1324
• www.GBPI.org