What should Georgia do with its $12 billion surplus? Experts: Spend it on education, Medicaid, tax credits and refunds

Georgia is sitting on nearly $12 billion of surplus, the most cash on hand in state history.  Here’s what some fiscal and government experts suggest doing with some of the windfall:

Danny Kanso, director of legislative strategy and senior fiscal analyst at Georgia Budget & Policy Institute

The state [should] plan around recurring spending in public education. We’re one of a handful of states that don’t account for poverty in our education formula. We know that poverty has a huge effect on how students learn and their ability to be successful. So we recommend the state increase and add funding that responds to the level of poverty in each district and school across the state. We can help to front load that through some surplus funds. Then, preserve it over the long term using recurring revenues.

Medicaid is an area where now we’re one of 11 [states] that hasn’t expanded Medicaid. More than half a million Georgians need access to health care and don’t have a path to getting access to health care otherwise. That’s one of the most important things we could do immediately. Those surplus funds could be part of that equation and should give us confidence that we can pay for it long term.

Use the surplus funds in an intentional way to manage the budget and ensure that we’re well-resourced enough to sustain those investments, rather than focusing on one-time uses. 

The most important thing the state could do to give economic relief to Georgians is to adopt an Earned Income Tax Credit. Thirty other states have it at varying levels. The federal government has it. Second to Social Security at the national level, the earned income tax credit has been one of the most successful anti-poverty programs in modern American history.

Dr. Jeffrey Dorfman, fiscal economist for the state of Georgia

One thing that’s very important, and the governor really insists on this, is it has to be a one-time thing. We can’t take these extra monies and spend them on an annual recurring thing because then when the money’s gone, now you’re burdening the taxpayers and you’re gonna have to raise taxes to keep paying for that. That’s why we’re looking at water and sewer systems and rural broadband and a lot of things like that where we can pay upfront costs with the money we have now. If we can do infrastructure investments and lower our ongoing expense structure. This is our ultimate goal.

Tony West, deputy state director for Americans for Prosperity Georgia

Keeping the rainy day fund fully-funded is a smart idea. Anything leftover could be used for more transformative tax reform. As much progress as we’ve made over the last six years on the tax code, there’s more room for improvement. If done right, it will lead to even more revenues down the road. That would be at the top of my list. Return some money to taxpayers. Pay down bond debt. Consider doing a one-time project, not a recurring one.

Eric Johnson, project director overseeing construction of the Hyundai EV Plant in Bryan County and former Senate president pro tem

I’d make sure the teachers’ pension fund has enough money to pay future retirees. Then, I’d look at what’s needed in education and health care [areas that have taken big budgetary cuts in recent years]. Lastly, make sure there’s enough money for disaster relief.

In Case You Missed It

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How would you spend the money? Contact Tammy Joyner on Twitter @LVJOYNER.

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