Budget Paper for Georgia Corrections

Introduction

Ask any financial planner the best way to manage your money, and he or she will undoubtedly tell you to "make a budget and stick to it!" Every sort of enterprise—whether it is a huge corporation, a small mom-and-pop store or a nonprofit advocacy group—must draw up a yearly budget. Budgets are crucially important to governments, as well. States must also prepare a budget, usually every fiscal year. (A few states' budgetary terms are biannual.) But what is a budget? (Sielke, 88-90).

The term "budget" refers to a list of an entity's planned expenses and planned revenue over a set period of time. Ideally, a budget details exactly how much money will be spent, and for what purposes. When it comes to the federal government, each year, the president submits a proposal with his budget priorities to Congress, which then debates those priorities and passes spending bills. Often, the government's spending exceeds revenues, in which case the government is said to be operating a budget deficit.

For states, the budget-setting process is similar to that for the federal government, with the head of the executive branch (the governor) submitting a proposal to the legislative branch. Together, the governor and legislature must use economic projections of how much revenue the state will take in—mostly in the form of taxes—and then determine how that money will be spent. State budgets determine how much money is allocated to public education; health care; state employees' salaries, health insurance and pensions; social programs for the poor, disabled and/or elderly; transportation; police forces and correctional facilities; parks and recreation; economic development and more (Rubin, 64-85).

Unlike the federal budget, however, budgets in nearly every state are legally required to be balanced when signed into law. A budget is said to be balanced when the predicted expenditures do not exceed the predicted revenue. If, during the course of the fiscal year, revenue is lower than expected or expenditures are higher than expected, or both, then the state government must work to rebalance the budget. Usually that is done by cutting funding.

The U.S. is currently in the midst of its greatest economic downturn since the Great Depression of the 1930s. Consequently, nearly every state is facing budget shortfalls. In an effort to rebalance their budgets, state governments across the U.S. are deeply cutting spending in many areas, from education to health care to social programs for especially vulnerable residents.

Those budget cuts have affected nearly all Americans, many of whom have expressed anger about the situation. Some of those angry Americans, however, have focused their attention on the balanced-budget requirements themselves. They maintain that state governments should be allowed to operate with a budget deficit, like the federal government. Are state balanced-budget requirements a good idea?

Opponents of balanced-budget requirements say that such rules arbitrarily restrict state governments from engaging in deficit spending—a practice that, if properly followed, could help stimulate local economies in lean times. Because of the balanced-budget requirements, state governments have been forced to make ...