With Congress promising more federal spending cuts, some Georgia
officials are facing up to a politically unpopular fact: the state has become
more reliant on billions of dollars from Washington since the start of the Great
Federal funds made up about $10.4 billion of state agency spending in fiscal 2008, according to an Atlanta Journal-Constitution review of budget records. Four years later, that figure was more than $12 billion, in part because the state had some leftover federal stimulus money. But the total will likely approach or top $12 billion again in the upcoming year. That's roughly 31.6 percent of state spending, up from about 27 percent in 2008.
Some top lawmakers regularly gripe about federal spending and the state Senate passed a resolution last year backing a federal balanced budget amendment to the U.S. Constitution. But lawmakers have also urged Congress to spend more on everything from Georgia reservoir construction and commuter rail to medical training, and they have approved tax maneuvers to draw down nearly $800 million a year in extra federal funding for health and nursing care.
With federal sequestration cuts hitting earlier this year and more expected, at least two state committees have been set up to consider ways to rein in costs of Medicaid and other federally-funded health care programs or figure out how to fund them if the stream of money from Washington slows.
The state has been using federal money to fill budget holes created by shrinking state tax collections and the higher demand for state services like Medicaid.
Gov. Nathan Deal said that can't continue.
"We cannot be hypocritical at the state level," said Deal, a longtime former Congressman. "We cannot continue to bombard the people in Washington, telling them they need to cut spending, they need to reduce the burden on taxpayers in this country by reducing their expenditures, and then when something like sequestration occurs, be the first to complain we're not receiving as much federal money.
Sen. Josh McKoon, R-Columbus, sponsored legislation creating a Senate committee to study alternatives to federal funding for health care programs. He said he's worried the state has become too dependent on Washington.
"We are basically making assumptions every year in the budget that the federal government is going to continue to carry the state of Georgia," McKoon said. "As a conservative who wants to see Washington tighten its belt, it's prudent as policymakers to start asking what is our contingency plan if federal funding is significantly reduced.
Sujit M. CanagaRetna, senior fiscal analyst for the Atlanta-based Southern Legislative Conference, said federal funding of states shot up dramatically during the Recession because of stimulus money that paid for everything from health care to education and other programs. However, he said, the federal share of state budgets was going up even before the recession.
Part of the reason is that state agencies and budget officials have found more ways to draw down federal matching money or programs that qualify for federal help. The number of Georgians eligible for public services that are funded by the federal government has also grown. That was especially true during the recession.
While lawmakers have long criticized the federal government for running
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