STATE OF GEORGIA DEBT

Think About It
Someone older and wiser than me is quoted as first having said: “Government will expand to expend every tax dollar it receives.” The literal meaning is that government will not hasten to reduce our tax rates even though revenues generally increase year after year. Our duty as citizens is to let our legislators know we understand and want change.

The main causes of government revenue growth are population increase and inflation. Yes, it’s true that population increase requires additional government services, but you would think that the volume discount effect would kick-in somewhere. Inflation, on the other hand, is the greatest ally the government tax collector has.

We have already discussed in this column the growth of the Federal government. Now, we will turn our attention to the state government. In the 1970’s, Georgia passed its first $1 billion budget. The FY 2007 Georgia budget is $18.6 billion. The state revenue increase this year over last year is expected to be $753 million, which is nearly the amount of the entire 1970’s annual budget. Now, I am sure your household income has gone up in the last 30 years. But are you making 18 times what you were in 1976? The state population in the 1970’s was approaching 5 million. Today, it is just over 8 million. The population has not gone up even 100% in 30 years.

Worse than this, is Georgia’s growing bonded debt. Even with a budget that grew 18 fold in 30 years, the State has been borrowing money in addition. From the new Constitution of 1945 until the mid 70’s, Georgia could not go into debt. However, the General Assembly was creating authorities such as the Jekyll Island Authority, and allowing them to borrow with Revenue bonds, backed with anticipated revenues. In the mid-70’s, the State Constitution was amended to allow General Obligation bonds of the State of Georgia, because it was supposed to give debt control back to the Legislators. Since that time, Georgia’s bonded debt has grown to around $8 billion, with interest amounting to nearly 5% of the annual budget. We are headed down the same path to ruin blazed by the Federal government.

When the State House and Senate Appropriations Committees hold hearings, they are visited by all the state department heads. The drill goes something like this: Mr. Chairman, last year we had 678 full time positions (employees). This year we need 743 full time positions (employees), etc, etc, etc. A bureaucrat’s success is measured by the size of his bureaucracy. The State of Georgia issues about 75,000 payroll checks, not including the University System, which is about 25,000 more.

You, personally, are represented directly by one State Representative, one State Senator, the Lt. Governor, and the Governor. In a republican democracy, they are supposed to represent your will. You should make them all aware that you want state spending and state borrowing reigned in, and taxes reduced. One letter is not enough. You need to be a constant reminder. As they say, “the squeaky wheel gets the grease.”