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Gov. Nathan Deal: Georgia economy is warming up

In his State of the State address, the governor points to initiatives from the coming fiscal year

Gov. Nathan Deal, center, flanked by House Speaker David Ralston, left, and Lt. Gov. Casey Cagle, tells a joint session of the Georgia Legislature and top state and judicial officials that the economy of Georgia is rebounding at the annual State of the State address Wednesday at the Capitol. (Special photo)

Gov. Nathan Deal, center, flanked by House Speaker David Ralston, left, and Lt. Gov. Casey Cagle, tells a joint session of the Georgia Legislature and top state and judicial officials that the economy of Georgia is rebounding at the annual State of the State address Wednesday at the Capitol. (Special photo)

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Gov. Nathan Deal makes a point Wednesday during his State of the State address to a joint session of the General Assembly at the Capitol in Atlanta. (Special photo)

ATLANTA — Any thought that Georgia state officials will reverse the decision to not expand Medicaid coverage in the state this year was put to rest Wednesday in Gov. Nathan Deal’s annual State of the State address.

Speaking to a joint session of the two houses of the General Assembly and the state’s top justices, judges and state officials, Deal said that he would continue to rebuff efforts to expand the program. The speech was streamed live on the Internet.

“(The) Affordable Care Act is anything but affordable and is costing our state $327 million this year,” Deal said. “You should be aware that, even without expanding, currently Medicaid and PeachCare cost every Georgian through federal and state taxes nearly $1,000 each year. Expansion would add 620,000 people to our taxpayer funded health plan, costing us even more.

“Now, the executive branch in Washington is trying to do what the courts deemed unconstitutional for Congress to do, but we will not allow ourselves to be coerced into expansion. Be assured, I am prepared to fight any intrusion into our rights as a state.”

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From left, House Speaker David Ralston, Gov. Nathan Deal and Lt. Gov. Casey Cagle stand at the podium as Deal prepares to start his annual State of the State address Wednesday. (Special photo)

Noting that educational spending had risen each year of his administration despite the impact of the recession, the governor said the policies and hard decisions state officials made during the recession enabled the state to emerge in good shape.

Each quarter since he took office, he noted, state revenues have increased on a year-to-year basis. Hard looks were taken on state programs for duplication and relevance, resulting in consolidations and eliminations that also resulted in cuts of 12,750 state jobs, a 16.5 percent decrease from five years ago.

Maintaining a low tax rate and creating an environment conducive to job growth is paying off as the state’s economy continues to warm up, he said. The state had to dip into its rainy-day fund for $1.48 billion to meet its obligation of balanced budgets in Fiscal Years 2008 and 2009, Deal said. Since then, the fund has increased 519 percent.

“My basic focus has been on creating private-sector jobs for Georgians,” he said. “With your help and the involvement of our business community, we have done some great things. We have implemented real tax reform, such as eliminating sales tax on energy for manufacturing; we have essentially removed the marriage tax penalty on working Georgia couples, and we have abolished the annual birthday tax on vehicles.”

Not everyone shared Deal’s view on the state economy and the way government has functioned. State Sen. Jason Carter, who is running for the Democratic gubernatorial nomination, had the Democratic Party’s rebuttal.

“Governor Deal says Georgia today is, ‘at the pinnacle.’ He is bursting with pride that a single magazine rated Georgia the best place to do business.” Carter said. “You can’t tell that to the 363,000 Georgians still looking for work. Our state ranks 40th in the nation in its unemployment rate. Georgia is not at its pinnacle.”

Carter argued that, adjusted for inflation, the average family in Georgia pulls in $6,000 less a year than in 2004 and that the state had dropped from 15th to 33rd in median income over the past 10 years.

Carter also was critical of education in the state, noting the U.S. Department of Education ranks Georgia fourth worst on graduation rates, nearly 75 percent of school districts have fewer than 180 classroom days in a year and that since 2008 schools have lost more than 9,000 classroom teachers while the number of students has grown. As a result, he said, 95 percent of school districts have had to increase class sizes and local property taxes have increased in 38 school districts statewide.

Deal said he expects election-year efforts to change the policies that he said have been effective.

“I feel certain that in this election year some will propose that we change our policies — and they may even have protesters to back them up,” he said. “Their solutions may sound appealing on the surface, but will ultimately require us to raise taxes on all Georgians. We must resist those temptations. Just as individuals cannot borrow their way out of debt, governments cannot tax their way out of a recession.

“There is no such thing as free money, particularly when it comes from Washington and has costly strings attached. Washington wants to mandate to Georgia how we spend our dollars,” the former U.S. representative said. “Let me tell you, in Georgia, we know a lot more about how to balance a budget than Washington does.”

During his administration which has focused on job creation, he said, the U.S. Department of Labor has reported the creation of 217,000 new jobs, dropping the jobless rate to its lowest level in five years.

Some initiatives that Deal said he plans to include in his budget proposal this year include:

— $35 million for the deepening of the Port of Savannah, which would bring Georgia’s share of the project to $266 million. “I intend for us to start dredging the project this year,” he said, adding 50 percent of the cost of this project will be devoted to environmental mitigation. “We have studied and planned long enough,” he said. “It’s time to start moving dirt.”

— Creating the Zell Miller HOPE Grant for technical college students who will have 100 percent of tuition covered when maintaining a 3.5 grade point average.

— Adding four technical college programs to 100 percent coverage under HOPE. Welding, health care technology, diesel mechanics and information technology would be added to three fields already covered — commercial driving, practical nursing and early childhood education.

— $10 million for a 1 percent interest loan program for technical college students.

— The awarding of HOPE scholarships and grants at 103 percent of the amount awarded last year.

— Using a $50 million Early Learning Challenge Grant awarded to Georgia to accelerate pre-kindergarten program reforms.

— Bringing current Forestland Protection Act Grants to help those local governments and school systems whose ad valorem tax digests are negatively impacted by the law. Of the $40 million, $22.6 million will go to school districts and the remaining amount to municipal and county governments.

— Implementing the largest single-year increase in education spending in seven years, an increase of $547 million over the previous year. “It will enable us, in partnership with local school districts to restore instructional days, eliminate teacher furloughs and increase teacher salaries,” Deal said. “These funds will provide our local school systems with the resources and flexibility to address the most critical needs of their students and teachers.”

— Education spending, expected to hit $8 billion in the new budget, accounts for more than half of the state budget and has increased by $930 million since Deal took office, not counting capital improvements. Deal 82 percent of new revenues will go to education funding.

— $44.8 million to better connect classrooms, particularly in rural areas, with the Internet.

— Implement the third phase of criminal justice reforms to better enable released offenders to be prepared to for work and avoid recidivism. A 25 percent reduction, he said, would result in 1,400 fewer crimes and 1,100 fewer victims annually.

— Continue a Zero-Based Budgeting analysis of state programs to consolidate duplicated services and eliminate unneeded ones.