Georgia Schooling Finances Primer for State Fiscal 12 months 2023

This part is co-authored by Okay-12 Senior Coverage Analyst Dr. Stephen Owens and Increased Schooling Senior Coverage Analyst Jennifer Lee. 

Georgia’s 2023 Schooling Finances

The state price range for Okay-12 public faculties is $10.7 billion in FY 2023. After years of budgets with devoted cuts to the state’s schooling system, lawmakers met the college funding requirement throughout the High quality Primary Schooling (QBE) Act for AFY 2022 and FY 2023. Moreover, this 12 months’s price range contains $287 million to offer a $2,000 elevate for licensed lecturers and workers, beginning September 1. The truth that this begin date comes two months after the start of the fiscal 12 months will go away districts to seek out the $300 hole per worker in native property taxes.

Together with sturdy income assortment and federal COVID aid, the Okay-12 price range benefited from elevated property tax assortment that grew extra in low-property-wealth faculty methods in comparison with high-wealth methods. Georgia’s faculties are financed by a mixture of state, federal and native {dollars}—a typical observe in the USA. The state paid $306 million much less in FY 2023 as a consequence of components necessities within the equalization and native 5 mill share grants.

The price range for the College System of Georgia and its related applications like agricultural extension companies is $3.1 billion. The price range for the Technical School System of Georgia and related applications like Grownup Schooling is $444 million, with this 12 months’s price range restoring funding to pre-pandemic ranges.
Lawmakers appropriated $1.4 billion from lottery gross sales to fund and administer Georgia’s Pre-Okay, HOPE and scholar mortgage applications. The state has about $1.7 billion in lottery reserves.

In regards to the giant federal investments, state lawmakers had a possibility to maneuver state fiscal coverage in the direction of racial fairness. The extra funds in schooling reversed a number of the most dangerous cuts of the previous 12 months however fell far in need of significant funding for the way forward for the state.

Equalization Grant Lowers for First Time in a Decade

The Okay-12 price range features a components grant for low-property-wealth districts that required $164 million much less in FY 2023 than the 12 months prior. The state has solely lowered the quantity offered to this grant twice since FY 2006, and each have been as a consequence of price range constraints and never the components calculation.

Since native taxes make up a good portion of college budgets, and property values differ significantly throughout the state, the equalization grant gives extra state funding to these districts that can’t depend on native sources. A discount implies that lower-wealth districts’ property tax assortment has grown sooner per scholar than their higher-wealth district counterparts.

One other chance is districts have, on common, lowered property tax charges—the components is tied to native effort. The $164 million drop in components earnings is a 21 p.c lower—the components had elevated 7 p.c yearly for the 9 years prior.

Georgia Schooling Finances Primer for State Fiscal 12 months 2023

Personal College Vouchers Value Accelerates

This 12 months lawmakers handed a $20 million improve to the Certified Schooling Expense Tax Credit score (QEETC)—a voucher that the Georgia Division of Audits and Accounts discovered is missing in transparency and oversight. This program gives a tax credit score to people who donate to pass-through organizations that then pay non-public faculty tuition for fogeys who apply. Georgians don’t have any assurances of how college students carry out as soon as they enter this program, as these faculties are usually not held to state requirements or examined to measure efficiency.

The QEETC is one in every of two state vouchers that funnel public funds to personal faculties—establishments that may reject college students by earnings, means, language proficiency, sexual orientation or faith. Georgia is projected to lose $155 million to those vouchers in 2022, with $1.3 billion diverted since 2008.

Pre-Kindergarten Program Grows, Nonetheless Lags Subsequent Grade

The FY 2023 price range for Georgia’s Pre-Kindergarten program is $401 million, a rise of $18.3 million from the earlier 12 months. This system saved $2.1 million from components reductions as much less was wanted to pay for trainer coaching and expertise, a potential signal of trainer attrition. Lawmakers this session dedicated $19.4 million to lift lead and assistant trainer pay by $2,000.

With 84,000 Pre-Okay slots obtainable the FY 2023 price range gives $4,773 per youngster, essentially the most offered for the reason that program’s inception. Kids one grade older in public kindergarten are allotted $6,450 per scholar in state funds, a distinction of $1,677 a toddler.

If Georgia have been to fund Pre-Okay on the similar charge as kindergarten, this system would wish a further $141 million yearly.

Baby Care Companies

The FY 2023 price range contains $61 million for Baby Care Companies in Division of Early Care and Studying (DECAL). Baby care companies makes up 13 p.c of the DECAL price range with Pre-Okay taking over the remainder of the state funds. The FY 2023 Baby Care Companies price range is about $3.7 million greater than the FY 2022 price range. Nevertheless, state funding for youngster care is just not fairly the place it was earlier than the pandemic.

A lot of the rise, $3.1 million, will go in the direction of the state’s match for the federal Baby Care and Growth Fund (CCDF). This can enable it to attract down all obtainable sources from the CCDF, which is a key funding useful resource for Childcare and Guardian Companies (CAPS) scholarships, Georgia’s youngster care subsidy program. An extra $500,000 for youngster care will go in the direction of growing supplier reimbursement charges for youngster care suppliers taking part in CAPS.

Federal aid laws offered a further tons of of hundreds of thousands of {dollars} to stabilize the state’s youngster care system.

College System of Georgia/Board of Regents

The 2023 price range for the College System of Georgia (USG) is $3.1 billion. The overwhelming majority, $2.8 billion, is allotted to USG’s 26 faculties and universities for scholar instruction, help companies and primary school operations. The remaining funds go to cooperative extension companies, public libraries and applications. This 12 months’s price range restores the college system’s funding to its pre-pandemic trajectory. Per-student quantities are much like FY 2009 and FY 2010 ranges, adjusted for inflation. Will increase embrace $100 million of enrollment-driven components will increase and $207 million for a $5,000 cost-of-living adjustment for full-time workers.

One of many largest adjustments is a $230 million addition to remove the Particular Institutional Price (SIF). The college system adopted the SIF in 2009 to make up for income loss from state price range cuts. The SIF made up about 40 p.c of scholar obligatory charges.

Final, the price range contains $65.9 million for capital upkeep and repairs at faculties and universities, which is generally funded by bonds.

Technical School System of Georgia

The technical school system (TCSG) contains 22 faculties that present each technical and core educational schooling. The 2023 price range for TCSG is $444 million. About $383 million is allotted to technical schooling, and the rest is for applications like Grownup Schooling for people and not using a highschool diploma and customised coaching for companies. This 12 months’s price range restores TCSG’s funding to its pre-pandemic trajectory. Per-student quantities are much like FY 2007 and FY 2008 ranges, adjusted for inflation, assuming a 3 p.c enrollment lower in 2021-2022 and regular enrollment in 2022-2023. A ten p.c enrollment lower in 2020-2021 resulted in a $23 million lower in components funding for the FY 2023 price range.

The price range provides $25 million for a $5,000 cost-of-living adjustment for full-time, benefit-eligible workers. It additionally provides $33 million to develop Allied Well being, Business Truck Driving and Manufacturing applications.

The price range contains $22.5 million for main repairs and renovations at technical faculties, which is generally funded by bonds.

Lottery Funds Assist Georgia’s Pre-Okay and HOPE

Georgia’s lottery funds are constitutionally devoted to help schooling and are accounted for individually within the price range.

Lawmakers appropriated $1.4 billion from lottery gross sales to fund and administer education schemes. The 2023 price range will increase awards funding for HOPE scholarships and grants by $78 million, or 9 p.c. Pre-Okay funds grew by $18 million (5 p.c) to fund $2,000 wage will increase for licensed lecturers and a $5,000 cost-of-living adjustment for different full-time workers.

Lawmakers made a number of vital coverage adjustments to lottery-funded applications within the FY 2023 price range. $10 million switch from Pupil Entry Loans to a brand new program, School Completion Grants. HOPE Grants and Scholarships now cowl 90 p.c of tuition in any respect technical faculties and college system faculties and universities. HOPE GED is renamed HOPE Excessive College Equivalency (HSE) and now pays for GED and HiSET exams for college kids, as much as $200.

HOPE Expenditures Range by Program

HOPE spending has modified at completely different charges. Zell Miller Scholarships grew quickest, averaging 16 p.c annual development from 2014-2021. HOPE Scholarships averaged 4 p.c development over the identical interval. HOPE Grant spending on technical school college students declined by two p.c yearly from 2014-2021, and the HOPE GED Grant (now HOPE HSE) decreased essentially the most, a median of 20 p.c yearly.

Setting HOPE Scholarships and Grants at 90 p.c of tuition will increase spending for these applications. It’s unclear how this can have an effect on future development.

Zell Miller Scholarship recipients at public faculties and universities are 70 p.c white, 6 p.c Black, 6 p.c Hispanic/Latinx and 12 p.c Asian. Thirty-one p.c of Zell Miller Scholarship recipients are from households with greater than $120,000 annual earnings. HOPE Grant recipients are 46 p.c white, 43 p.c Black, 7 p.c Hispanic/Latinx and one p.c Asian.

No Cap on Lottery Reserves

Yearly unspent lottery {dollars} switch to reserves managed by the State Treasury. On the finish of the 2021 fiscal 12 months, about $71 million in surplus transferred to the lottery reserves.

Since 2011, state regulation requires the lottery shortfall reserve to carry an quantity equal to 50 p.c of the earlier 12 months’s web lottery proceeds. If lottery ticket gross sales underperform, the state can draw on this reserve to fund HOPE. After reaching the 50 p.c goal, further reserves are thought of unrestricted. On the finish of FY 2021, the required Shortfall Reserve Stability was $619 million, and the state exceeded that steadiness by greater than $1 billion. Whole lottery reserves now stand at $1.67 billion, or 108 p.c of lottery proceeds.