Georgia Budget Hole in FY 2011

The state of Georgia seems to be facing serious budget shortfalls unless something is done.

Of course, the state is suffering from the Great Recession like many other states.  We have had the most individual banks fail (39 since 2008, search of FDIC website performed on June 30, 2010).  Our official unemployment rate is 10.2% (retrieved from GA DOL on June 30, 2010).  The state budget, as is, already has a budget hole around $200,000,000 due to lower than anticipated tax receipts.

On June 26, 2010, the United States Senate voted against cloture on the "American Jobs and Closing Tax Loopholes Act of 2010" (H.R.4213).  When that version of the bill went down to Republican filibuster, a huge new concern for the stability of the United States was created.  Both Senators from the state of Georgia voted against cloture.

The version of the bill that was defeated included provisions for $19 Billion in state aid.

"(Sec. 229) Amends MIPPA to provide additional funding for FY2010 to the Centers for Medicare & Medicaid Services Program Management Account for state health insurance programs." --Senate Bill Summary.

The FY 2011 budget of the state of Georgia was depending on about $378.5 million in stimulus funding for Medicaid.  There does not appear to be an alternative budget that omits the funding.  Some states were more proactive and prepared alternative budgets or even omitted the stimulus funding.

"[T]he FY 2011 budget is heavily reliant on enhanced Medicaid funding originally included in the federal Recovery Act being; it assumes U.S. Congress will extend it for 6 additional months. Such an extension would make the enhanced federal funding available for all of FY 2011.

Currently, this enhanced funding is slated to expire in the middle of FY 2011 (December 31, 2010). While the U.S. Congress is currently working on legislation to extend this funding for an additional six months, as of the time of this publication, such an extension has not yet been passed. Without this extension, the DCH budget will be short approximately $378.5 million. In total, Georgia is using nearly $750 million in enhanced Medicaid funds from the Recovery Act in the FY 2011 budget." --Georgia Budget and Policy Institute Report (PDF)

In addition to the Medicaid budget shortfall, the filibuster of the bill ended extended unemployment benefits.  Extended unemployment benefits became available when a person had been unemployed for more than 26 weeks.  There is a modified unemployment bill back before Congress.

"After trying for weeks to extend jobless benefits as part of a broader economic package, Democrats said Tuesday that they would jettison all other provisions -- including $16 billion in aid to state governments -- and push solely for a six-month extension of jobless benefits and a small adjustment to a tax credit for home buyers." --Democrats seek to extend emergency jobless benefits

The extended unemployment benefits expired on June 2, 2010.  No new applicants are eligible.  Upwards of 2 million unemployed citizens will lose their benefits if nothing is done.  The state of Georgia will have about 7000 unemployed persons lose their benefits per week that might otherwise have been able to receive additional unemployment compensation.

Between the thousands of people that will no longer have any income and the nearly $600,000,000 budget shortfall, I think that Georgia, along with the rest of the states affected by non-passage of this bill, is going to have a tough year.