Opinion: Growth, patience pay off for conservative governance


Legislators passed scores of bills this year, as usual. But the 2018 session, which ended just after midnight Thursday, will be remembered best for three seemingly contradictory fiscal measures.

The state’s reserves remained on track to hit $2.5 billion by year’s end. K-12 public schools were fully funded for — depending on who you ask — either the first time since 2002 or the first time since the current formula was created in the 1980s. And yet, lawmakers also managed for the very first time to cut the state’s top income-tax rate.

It’s worth reviewing how all this was possible, because it shows how steady, conservative governance works.

When Gov. Nathan Deal took office seven years ago, the situation was bleak. Revenues were still recovering from a $2 billion hole the Great Recession blew in the state budget as businesses closed and people lost their jobs. Public schools were in the first of four straight years in which spending was cut by $1.1 billion, which was actually an improvement over the $1.4 billion cut they saw the year before that.

How did Deal and legislative leaders respond? They didn’t raise taxes. They managed the budget cuts as best they could. And they set about trying to improve the state’s economic climate to attract the jobs that would fill that budget hole.

Seven years later, Georgia has been named by one magazine as the No. 1 state in which to do business for five years running. Such name brands as Caterpillar, Mercedes-Benz, State Farm and more have made substantial investments in the state. Georgians went back to work, and the state’s coffers filled back up.

It didn’t happen all at once. Along the way, some impatient folks called for tax hikes to speed up the fiscal recovery. But such a move likely would have diminished the economic recovery Georgians continue to enjoy.

Seven years later, annual revenues have soared from their lowest point during the recession, to a projected $26 billion from $16.6 billion. Except for the 2015 boost in gas taxes to fuel more transportation infrastructure, to the tune of about $1 billion per year, the increase has come from economic growth.

Ultimately, growth is the best way to fill a budgetary hole.

But the fruits of that growth mustn’t be squandered. Deal set two clear priorities for the state’s surging revenues: reducing the austerity cuts for public schools, and building up the state’s reserves so that a future downturn might not be so crippling.

Seven years of keeping his eyes on that prize allowed the big breakthroughs this year: not only getting schools to full funding, but cutting the top income-tax rate to 5.75 percent next year and eventually to 5.5 percent. Those rate cuts may have been possible only because of the federal tax reform that broadened the state’s tax base, but they wouldn’t have been possible even then if not for deft fiscal management all along.

To achieve both of those in one year, plus the large reserve fund, is the culmination of all that work.

It’s not as if these were the only fiscal challenges along the way. Teacher pensions have required hundreds of millions of dollars in additional funding, as has the state’s Medicaid program, as well as its colleges and universities. None of that prevented these latest achievements, just delayed them.

So the other key here is patience. Growth takes time. Agencies and activists don’t always want to wait, for more spending or for tax cuts. Lawmakers face pressure to “do something” — now.

Resisting that pressure is the way to do something better, in the end.


Reader Comments

Next Up in Voices

Signs that Georgia Republicans may be ready to tackle health care
Signs that Georgia Republicans may be ready to tackle health care

For the next few minutes, ignore that federal judge in Texas, the one who declared Obamacare to be unconstitutional — lock, stock and barrel. From pre-existing conditions to the 26-year-old offspring who still lingers on your health insurance plan. Depending on the appeal process, that’s a future that could be more than two years away....
12/19 Mike Luckovich: Flag on the side
12/19 Mike Luckovich: Flag on the side

The Jolt: The Confederate battle flag takes a hit among white Southerners
The Jolt: The Confederate battle flag takes a hit among white Southerners

Half of all residents in 11 Southern states maintain that the United States was founded as an explicitly Christian nation, according to a Winthrop University poll on regional attitudes that was released this morning. The Christian nation belief was particularly strong, as one might expect, among white evangelicals polled. Seventy-six percent of them...
Could Uber fee pay for mass transit in Georgia?
Could Uber fee pay for mass transit in Georgia?

As The Atlanta Journal-Constitution recently reported, Uber is in a high-stakes dispute with the Georgia Department of Transportation, which says the company owes $22.1 million in sales taxes and other charges.  The department says ride-hailing companies like Uber and Lyft must pay sales taxes under Georgia law – just like taxi and...
Recount ordered in repeat election for Georgia House seat after tally shows 2-vote difference 
Recount ordered in repeat election for Georgia House seat after tally shows 2-vote difference 

A recount was ordered Monday in the repeat election for a Georgia House seat after a tally showed the incumbent losing by two votes. State Rep. Dan Gasaway’s attorney, Jake Evans, said the Homer Republican sought the recount in his race against GOP challenger Chris Erwin after exploring his legal options. “If any election shows that...
More Stories