Comparing Georgia’s Fiscal Policies to Regional and National Peers

• FRC Report 201 Version
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• December 1, 2009 Create Date
• February 11, 2020 Last Updated

FRC Report 201, December 01, 2009, Robert D. Buschman

The purpose of this report is to analyze the major components of Georgia’s state and local revenue and expenditure mixes relative to its peer states. Combined state and local revenues are broken down into the major types of taxes (i.e. personal and corporate income, property, sales, excise, etc.) as well as federal transfers and other sources, and are compared on a per capita basis to other states generally, to the southeastern states and to states maintaining “triple-A” debt ratings. Likewise, combined state and local government expenditures are broken down by the character of the expenditure (i.e. current operations, interest on debt, etc.) and its function or purpose (e.g. education, social services, or transportation). For each, per capita expenditures are compared to regional and national peers.

Data used for the analysis are the latest currently available from the U.S. Census Bureau’s Government Finance Statistics (“GFS”) database. In particular, data are combined state and local revenues and expenditures from the 2006-2007 Annual Survey of State and Local Government Finances, covering fiscal years ending in 2007. Census government finance data provide consistent reporting of government revenues and expenditures across states over time. See the Appendix for a fuller discussion of the GFS database. Census population estimates as of June 2007 are used for the calculation of per capita revenue and expenditure data.

For each category, Georgia’s per capita revenue or expenditure amount is
ranked against all other states, southeastern states, and states with a AAA-bond rating; a summary table including national, southeast regional, and AAA-rated averages and other summary statistics is presented to support the discussion.

In brief, this analysis finds that Georgia ranks below all of its southeast peers and among the lowest of all states, at 46th, in terms of per capita total revenues. On per capital total direct expenditures, Georgia ranks somewhat higher at 41st nationally and lowest among the 8 southeast states. Both of these rankings are higher than in the prior year when Georgia ranked 50th nationally on per capita total revenues and 46th on per capita total expenditures. Southeastern states together average about 3 percent below the AAA states and significantly below the national mean on both the revenue and expenditure measures. Georgia falls below the southeast state means on these broad measures, though by a wider margin on revenues (10.5 percent) than on expenditures (5.9 percent). However, where Georgia ranks on specific revenue and expenditure subcategories varies considerably as Georgia differs from others in the types of revenues on which it depends and in the focus of its expenditures.

The organization of the report is as follows: Section II analyzes the revenue side, organized by source from broad categories to narrower, specific taxes. Current charges and miscellaneous general revenues are included as one category, but a detailed analysis of the items comprising this category is left to another FRC report (Bluestone, 2009). Matthews (2009) provides a historic perspective on selected revenue sources. Section III analyzes the expenditure side, first by the character of expenditure and then by the ultimate governmental function or purpose. Section IV concludes.