In 2011, Georgia’s rainy day fund was used to cover the spending needed during the rocky recession years, but now, after Gov. Nathan Deal’s time at the helm, the fund has grown to $2.3 billion.
Plus, the state’s financial forecast over the next 18 months looks solid, according to state fiscal economist Ken Heaghney: near full employment, strong consumer spending, a continuing housing market recovery, and below-target inflation. So, without any signs that Georgia’s economy is about to enter into a recession, Heaghney expects continued growth over the next year and a half.
One less positive piece of news is the nationwide pension crisis, which Georgia is not immune to. According to a December 2017 report from the American Legislative Exchange Council (ALEC), the unfunded liabilities of state and local pension plans nationwide ballooned from $433 billion to more than $6 trillion in the last year alone.
In Georgia, the unfunded liability is one of the 10 worst at more than $143,074,967,721. Per capita, that’s $13,877 per person, which is the 15th “best” in the nation. Georgia’s public pension funding ratio is 36.2 percent, which is also 15th “best” in the U.S. For comparison, the national average funding ratio is 33.7 percent, or $18,676 per person. California’s total liability is the worst ($987,774,192,764), Alaska’s is the worst per capita ($45,689 per person), and Connecticut’s funding ratio is the worst (19.7 percent).
“Absent significant reforms, unfunded liabilities of state-administered pension plans will continue to grow and threaten the financial security of state retirees and taxpayers alike,” the report warns. “The fiscal calamity could be far deeper and prolonged than the Great Recession.”
So while Georgia’s financial future looks relatively strong, the Legislature would be wise to turn its attention to this issue.