Georgia Has At Least $18.76 Billion In Surpluses of the Taxpayers Money it is not using.

  FY 2002 Report Home Page Flags courtesy of Robesus Inc.



The State of Georgia at the State-level has approximately $18.76 billion of the taxpayer's money it is not using, i. e. surpluses equal to $2,192 for every man, woman and child in Georgia or $8,767 for a family of 4. This does not include all the additional surpluses that exist in the school districts, cities, or counties in Georgia.

If the $18.76 billion were returned to the people, the State would have a huge surplus to refund to the taxpayers. Such a refund would help payoff credit cards, create jobs, increase wages, business income would increase, increase State and local government revenues, dramatically increase the economy, and create the greatest economic expansion in the history of the State. Everyone wins.


The 2002 unemployment was not available. However, the table below demonstrates that if the $18.76 billion were returned to the people, 377,169 jobs would be created. I assure you there would be no unemployment in Georgia, but a labor shortage.

In addition, unemployment claims of approximately $861 million could be saved.

The Georgia review is shown in Exhibit A below in this report.

Simultaneous Budget Deficits/Shortfalls and Financial Surpluses

This is the most deceiving topic that governments, politicians, and the news media have conveyed to the public about governmental financial matters. In realty, a government can simultaneously have a budget shortfall and a financial surplus of the taxpayers' money.

The problem can be broken down into three areas:

1. The budget only covers a small portion of the State's financial condition. There are a group of funds not part of the budget process. The complete list of funds and budgetary requirements are found in the Comprehensive Annual Financial Report (CAFR). This report depicts the complete financial status of the State. The budget only covers a portion of the financial resources.

2. The budget is current revenues minus current expenditures. Previous years' revenues are normally not considered in the current budget, but should be. In other words, the previous years' revenues are not recycled back to the current budget process.

The process for the Budget Fund in Georgia indicates that they do have a "Carry-Over from Prior Year"; however, we do not know whether it includes all the budgeted items, but we assume it does. In spite of this, we still have surpluses.

3. The budgeted funds and non-budgeted funds should have zero-based funding on a pay-as-you-go basis. What this means is that you budget to have a zero fund balance. If you plan to spend $100 you budget for $100 with no excess or reserve allowed.

Here are some examples:

Georgia Technology Authority made a profit of $7 million and also had a cash-investment reserve of $59.4 million.

Unemployment Compensation Fund had net expenses of $374 million and cash-investments of $1.5 billion. That is 4 years of reserves.

Environmental Facilities Authority made a profit of $83 million and also had a reserve of $318 million.

Workers' Compensation Fund had net expenses of $1.3 million and also had reserves of $176 million. That represents 132 years of reserves.

These are only four (4) of the 45 or so funds listed in the report below that make up the $18.76 billion in surpluses.

What Should be Done With the Surpluses?

Alan Greenspan, Chairman of the Federal Reserve, Told Us:

In his testimony to the Senate Humphrey-Hawkins Committee, Alan Greenspan, Chairman of the Federal Reserve, in late July 1999 gave us a clue on what he thought should be done when he stated:

“I'm of the old fiscal school that you raise revenues for basic government purposes and if you don't have those purposes you give the money back or you don't tax it... My experience is that private rates of return are significantly higher than the governments rates of return.”

What did he say?

  • If a government collects too much from the people, the government should give it back.

  • It is better to let the private sector use the money than governments. This we will prove beyond a reasonable doubt.

Government Surpluses are the taking of the peoples property without the right to take:

In a recent Wall Street Journal article, Mr. William P. Kucewicz, made in-depth observations and insights regarding the role of governments holding surpluses of the peoples money. We could never have said it as eloquently as he has:

"...Almost no one seems to note that a surplus at any level of government represents money that would otherwise be used for consumption or investment by those who earned the income in the first place. And to the extent that it's squirreled away by government and isn't used, say, to retire debt, it's a drain on the economy.

Also missing from the discussion is a basic question: Whose money is it, anyway? Government's moral legitimacy is derived from the people. This cornerstone of the classical liberal tradition presupposes that government's precursor is the individual, endowed with a natural liberty as a free moral agent...

...Although taxation is legitimate, running a government surplus isn't. It represents a taking by the state, because it exceeds the government's contract with the community. It is no different than if a federal agency were to take a person's land or possessions without just compensation (an activity barred by the Fifth Amendment). Excess taxation isn't what the people bargained for.

...In presuming entitlement or authority not ceded by the community, the state abrogates its moral pact with those it governs. Its power is no longer derived from the people, whose rights to liberty and property it boldly denies." (Emphasis added.) (Mr. Kucewicz is editor of the global investment site

What the Legislators should do

The State legislators should include in the next year's budget the previous years revenues not spent as indicated by the CAFR. These were once a revenue and should still be considered revenue for budgetary purposes.

Also, they should consider a zero-balance budget concept for all budget and non-budgetary items in the CAFR including the College and Universities and the Component Units.

Budgeted expenditures (for the budget) should be last year's expenditures (from the CAFR) adjusted for demonstrated requirement changes in project, program or services. An increase in requirements should include the costs of these additional requirements. Conversely, a decrease in requirements should result in a decrease in costs associated with the decreased requirements.

The State legislators should take into consideration the entire financial condition/status of the State in the budgetary process by including the fund balances in the CAFR as being a part of the budget.

This system is covered in the CAFR Budget System.

If the State holds the excesses/surplus, it will earn 4% to 5% on that money. If the State returns the money to the people it will receive 20% in revenue because of the increased economic activity. This is elementary economics.

Laws need to be changed

There are laws that state this or that regarding the use of some of the funds. Man made the laws, man can change the laws. How much effort would it be to include at the end of every law "...or if considered excess or not needed for the current operation that the funds will be refunded to the taxpayers?" See how easy it is. The Georgia Constitution has been changed over 100 times. It can be changed again if need be to benefit the people.

If this were accomplished, the State would have a huge surplus to refund to the taxpayers. Such a refund would create jobs, increase wages, increase State and local government revenues, dramatically increase the economy, and create the greatest economic expansion in the history of the State. Everyone wins.

If you want to know the financial condition of your government(s), do not look in the budget. Get the CAFR.

What are these surpluses you have been talking about?

Government surpluses, as used in this report, are funds that are not required or needed for the operation of all government operations, funds, accounts, agencies, etc., directly or indirectly, for the year(s) covered by the budget which is usually one year. Theoretically, at the end of every fiscal year, governments should have little or no cash/investments on hand. But what we have found is that most governments have huge amounts of cash and investments on hand at the end of the fiscal year. And somehow these cash and investments are not being recycled back through the budget process the next year, but are being held year-after-year and the income and amounts keep increasing.

The Synergistic Magic of Economics.

What happens when the government holds the $18.76 billion.

  (In Thousands) Investment Income   Per    Capita Family of 4  
  The government holds and investments the surpluses at 4.5%. 844,280 99 396

Here is what happens when the $18.76 billion is returned to the taxpayers (the private economy).

  (In Thousands) Surplus
Per    Capita Family of 4    
  The surplus is returned to the taxpayers. 18,761,781 2,192 8,767  
  Wages are increased. 9,380,891 1,096 4,383  
  State government revenues increase. 3,771,693 441 1,762  
Local government revenues increase. 3,017,355 352 1,410  
  Federal government revenues increase. 7,543,386 881 3,325  
  Total Benefits...   4,962 19,847  

In addition, 377,169 jobs are created. This is why it is disastrous for governments to hold excesses of the taxpayers money.

Note: The economic impact analysis above is further explained at this location.

The business community suffers the most.

Before the 9-11 tragedy, President Bush and Congress provided tax rebates which averaged $427 for every American. This was to create an additional $60 billion in consumer (economic) spending, turn the economy around and create jobs for the unemployed. However, 9-11 change that and an additional 1 million jobs were lost and the economy, already in a recession, continues to deteriorate.

As the above economic impact chart shows, if the State returned the $18.76 billion in surpluses to the people the State economy would grow by $4,406 per capita. That is 10 times the amount the Federal government used to stimulate the U.S. economy. Businesses net incomes could double or triple. This is elementary economics.

There is no need for a budget crisis, an economic recession or unemployment in Georgia.


For a list and response to the various excuses provided by governments for holding excesses of the taxpayers money, please go to this link.

Forget the excuses. We are talking about giving the money back to the people because it is surplus to the immediate needs of the government. Is there a law in Georgia that says the surpluses cannot be returned to the people either through refunds or tax/revenue reductions? If there is, it should be repealed. We do not need a communist governmnt in the U.S.

What you can do

Tell a friend or relative about this report.

Did you know that if you tell 5 people about this report and ask them to tell 5 more people, that in only 8 iterations, 390,625 people will be notified?

Contact your State representative (or all your State representatives).

Send them an email, send them a copy of this report, and ask them to provide you with their results of analyzing the CAFR. If you only want to provide a link to this report, the link is

Locating Your State Representative

Locate Your State Elected Officials Here:  

Exhibit A

The 2002 CAFR is located at:

Items not Included

The following items are not included in the amount of surplus shown:

-Buildings, roads, bridges, land (not for sale), and equipment.

-Deferred compensation plans for employees. These are plans in which the employee contributes to his/her retirement over and above the normal employee retirement contribution.

-Any fund that is 100% supported by donations, bequests, gifts, endowments, etc. These are not taxpayers money.

-For Colleges and Universities. All endowment and similar-type funds should not be included as surpluses. Sometimes these funds are combined with other college/university funds. We are interested in surpluses, so in these cases the total amount should not be included.

-Funds in which the revenues/contributions are 100% held for other individuals, organizations or another government.

-Funds that are required by law in which a bank, financial institution, insurance companies, etc. are required to deposit with the government a certain amount for insurance against the entity going bankrupt. These are not taxpayers' money.

-Retirement/Pension Funds - only included are 1/2 of the actuarially determined excesses, the taxpayers portion. The other 1/2 is the government employees portion.

How to Review the CAFR.

Here is the simple way to review the CAFR.

1. Get a copy of the FY 2002 CAFR or download the CAFR-see above.      
2. Go to page 39 of the CAFR.      
3. Go to the column entitled Road and Tollway Authority.      
4. You see the following:      
  Current Assets:      
  Cash and cash equivalents... 16,716,229    
  Investments... 11,905,108    
  Other Current Assets... 0    
  Noncurrent Assets:      
          Investments... 0    
          Restricted Assets:      
  Cash and Cash Equivalents... 285,425,509    
  Investments... 341,541,787    
  Other Noncurrent Assets... 48,232,525    
  Total... 703,821,158    
5. Go to the schedule below and confirm the amount.      

Now, do this for every item listed in the Exhibit A below. You have just proved to yourself that the surpluses exist.

  Review of The State of Georgia CAFR- FY 2002

CAFR Page List of Investments By Fund Potential Surpluses Notes
  Governmental Activities:    
22    General Fund 4,468,599,011  
22    Georgia State Financing and Investment    Commission 1,852,162,160  
102    Debt Service 228,453,750  
     Capital Projects:    
102       Georgia Building Authority (Hospital) 3,791,708  
103       Georgia Building Authority (Markets) 280,224  
103       Georgia Building Authority (Penal) 1,802,745  
103       Georgia Education Authority (University) 2,493,415  
103    Permanent Fund 13,500  
  Proprietary Funds:    
     Enterprise Funds:    
26       Georgia Technology Authority 59,380,791  
26       Higher Education Fund 814,548,234  
26       State Employees' Health Benefits Plan 666,285,457  
26       Unemployment Compensation Fund 1,521,122,080  
     Internal Service Funds:    
112       Department of Administrative Services 4,004,737  
112       Georgia Building Authority 12,501,296  
112       Correctional Industries Administration 8,961,463  
112       Merit System of Personnel Administration 2,184,515  
113       Removal of Hazardous Materials 496,617  
113       Risk Management:    
114          Liability Self-Insurance Reserve Fund 261,833,429  
114          Property Insurance Fund 18,112,525  
114          State Employees' Assurance Department 752,931,000  
115          Georgia State Indemnification Commission 1,058,394  
115          Supplemental Pay Fund 5,372,875  
115          Teacher Indemnification Fund 223,439  
115          Unemployment Compensation Fund 4,653,947  
115          Workers' Compensation Fund 176,310,868  
  Fiduciary Funds:    
     Private Purpose Trust    
138       Auctioneers Recovery Fund 324,657  
138       Keds Corporation Settlement Fund 64,999  
138       Real Estate Recovery Fund 1,879,063  
138       Subsequent Injury Trust Fund 16,971,374  
91       Employees' Retirement System (1/2 the actuarial       determined surpluses-6/30/2001) 96,684,500  
     Investment Trust :    
64       Georgia Fund 1 3,885,133,051  
65       Georgia Extended Asset Pool 987,843,191  
66       Regents Investment Pool 106,057,046  
36    Agency:    
  Component Units    
38       Development Authority 48,974  
38       Environmental Facilities Authority 317,783,400  
38       Housing and Finance Authority 1,169,931,562  
38       Lottery Corporation 359,382,000  
38       Ports Authority 48,166,000  
39       Public Telecommunications Commission 12,980,746  
39       Road and Tollway Authority 703,821,158  
39       Stone Mountain Memorial Association 17,425,739  
39       Student Finance Authority 4,867,066  
39       World Congress Center Authority 48,502,523  
39       Nonmajor Component Units 116,336,146  
  Total Potent Surpluses… 18,761,781,375  
  Per Capita… 2,192  
  Family of 4… 8,767  

Note: For those familiar with governmental accounting, for potential surpluses we basically used GFOA Balance Sheet Account Classification Codes 101, 102, 103, 151, 153, and 170.

USAF Image

This report was prepared by:
Gerald R. Klatt
Lieutenant Colonel, USAF, Retired



This report can be copied, reprinted, and/or electronically transmitted to others and/or printed in the news media. This report should not be used for commercial purposes.