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Abstract: 

Georgia responded to the revenue shortfall caused by the COVID-19 recession by reducing its proposed FY 2021 budget by $2.2 billion, reducing state agency spending by approximately 10 percent and drawing funds from its Revenue Shortfall Reserve (rainy day fund). The state constitution requires a balanced budget, prohibiting appropriations that exceed the total of estimated revenue collections plus any available budget surplus. The Revenue Shortfall Reserve is a fund designated for the purpose of maintaining a balanced budget if a shortfall occurs in estimated revenues. It had been gradually restored following its use during the Great Recession (FY 2008–2009) and was available in 2020, in combination with spending reductions, to achieve a balanced state budget. Georgia’s culture of fiscal conservatism sustains its commitment to the principle of a balanced budget.

Keywords: Georgia, balanced budget requirement, COVID-19 recession, fiscal conservatism, recession readiness

Affiliations:  1: Georgia Budget and Policy Institute ; 2: University of Georgia.