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This Week in the Georgia Legislature |
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State Revenues
State revenues for the first six months of this fiscal year are running 8.1 percent ($588 million) ahead of the FY 2010 revenue collections. More than $127 million of the growth is accounted for by a decrease in the number of refunds distributed. Discounting fewer refunds distributed, actual revenue growth is 4.5 percent.
The governor's FY 2011 revenue estimate projects an increase in revenues of 4 percent ($610 million). It seems highly likely that the fiscal year will end in a surplus of several hundred million dollars, which the governor has stated will be used to begin rebuilding the Revenue Shortfall Reserve.
According to the governor, his FY 2012 revenue estimate is a modest 3.75 percent. The governor included in his FY 2011 base $288 million in one time revenues from the GEFA monetization. Not taking into account the one time revenues from the GEFA monetization and comparing growth in taxes and fees, the revenue estimate actually projects a more substantial increase of 5.8 percent compared to FY 2011 projected collections. However, to drive a surplus of $300 to $400 million in FY 2012 to continue rebuilding the Revenue Shortfall Reserve, revenues will need to grow between 7 and 8 percent.
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| House and Senate Calendar
The House and Senate are scheduled to go into session for the 11th legislative day on Monday, February 7. They are off on Tuesday, February 8 and go back in session for the 12th and 13th legislative days on February 9 and 10. |
| State Budget: FY 2011 Amended and FY 2012
Process
Governor Deal released his proposed budgets on January 12, 2011. The House and Senate appropriations subcommittees have been meeting the past two weeks on the Amended FY 2011 Budget. (Download the proposed budgets.) The Amended FY 2011 Budget is expected to come out of the House Appropriations Committee on Wednesday, February 9 and go to the floor of the House on February 10. GBPI Analysis
The governor's FY 2012 budget proposal is disappointing in that it does not take a balanced approach to solving the state deficit. The budget contains additional cuts to education, with significant cuts to higher education, as well as cuts in services to our most vulnerable populations. A balanced approach to the fiscal crisis that includes additional revenues would assure that the factors most important to economic growth in the state, such as higher education, receive the necessary resources for Georgia to prosper.
The following are GBPI analysis:
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| Fiscal and Tax Policy
Special Legislative Committee Takes Up Tax Council Recommendations
The Special Joint Committee on Georgia Revenue Structure met for the first time on Wednesday to hear a presentation by members of the Tax Council. The Tax Council presented the income tax portions of their final report, and delayed the sales tax and other tax recommendations for a future meeting. The Tax Council also held a conference call meeting this week to amend their final report. After pressure from Grover Norquist and Americans for Tax Reform, the Tax Council amended the report to reiterate their intention of a revenue neutral tax package in the long run.
As the Special Joint Committee moves forward on tax reform, GBPI offers adjustments to the Tax Council's recommendations to lessen the tax shift:
- Maintain the grocery exemption;
- Lower the income tax rate to 4.5 percent rather than the 4 percent recommended by the Tax Council;
- Re-craft the proposed personal income tax credit into a robust, refundable low income tax credit and targeted standard deduction.
Download GBPI's analysis with additional adjustment options here.
Click here to watch a video of Majority Leader Larry O'Neal, a member of the Special Joint Committee, discuss tax reform.
TABOR Bill Read for Second Time in Senate
The Senate read for a second time Senate Resolution 20. The constitutional amendment would restrict state spending to a formula of population plus government inflation, similar to Colorado's TABOR.
In 2005, Colorado voters suspended the TABOR formula for five years to stop the many harmful budget cuts that had occurred under TABOR. Since Colorado adopted TABOR in 1992, more than 20 state legislatures have rejected TABOR, and it has been voted down in every state in which it reached the ballot, according to the Center on Budget and Policy Priorities. Business leaders, elected officials from both parties, and higher education officials, among others, recognize that TABOR has limited Colorado's ability to fund critical services. Click here to watch a video on this issue. Senate Resolution 20 moves to the Senate Rules Committee. |
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Affordable Care Act
Several health care bills have been introduced in the first 10 days of the session, with many focusing on private health insurance plans and the new national health care law, the Affordable Care Act.
House Bill 47 is similar to legislation introduced in recent years to allow health insurance companies to sell health insurance products licensed in other states. These products would be sold to Georgians even if they don't meet requirements for health plans under Georgia law. Effectively, this bill would allow insurers to sell plans to Georgians that do not cover certain benefits that must be covered by plans licensed in Georgia. The bill is assigned to the Health and Life subcommittee of the House Committee on Insurance.
Senate Bill 17 would create a Special Advisory Commission on Mandated Health Insurance Benefits, effective in 2012. The Commission would be charged with a variety of duties, including developing a system to asses the effect of mandated benefits taking into account the costs and impact of treatment and the cost savings to the health care system. In particular, the Commission would be charged with assessing the social and financial impact and the medical efficacy of new mandates when they are proposed. This bill has been referred to the Senate Insurance and Labor Committee.
Several bills have been introduced that seek to prevent state agencies from, or limit the ways in which state agencies go about, implementing the Affordable Care Act. In particular, Senate Bills 20 and 25 seek to prevent agencies from implementing any portion of the law without approval from the legislature, while Senate Bill 23 would prevent agencies from proposing or adopting any administrative rules regarding the implementation or enforcement of the Affordable Care Act without legislative approval. All three of these bills have been assigned to the Senate Health and Human Services Committee.
In addition, Senate Bill 22 authorizes and directs the governor to seek a federal waiver of provisions that require health insurance plans to spend a certain amount of the premiums they collect on health care services as opposed to administrative or marketing expenses. The portion of premiums directed to health care services is called the Medical Loss Ratio (MLR) and the Affordable Care Act sets new rules establishing minimum MLR requirements for health insurance plans. This bill has been assigned to the Senate Health and Human Services Committee.
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Norquist vs. Tax Council: Whose opinion really matters?
The recommendations
by the Special Council on Tax Reform and Fairness for Georgians has sparked a long overdue debate of Georgia's antiquated tax system. Critics like Grover Norquist, president of Americans for Tax Reform, a Washington, D.C. based group, opposes the recommendations despite the fact that they would move Georgia into the 21st century. GBPI Executive Director Alan Essig takes the issue head on in his latest commentary, "It's time for a real conversation about quality of life and tax reform". Click here to read the commentary. |
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Stay connected.
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| GBPI in the News
NPR Weekend Edition
Atlanta Journal-Constitution
Savannah Morning News
Rome News-Tribune
Atlanta Business Chronicle Tax reform should benefit everybody Creative Loafing Atlanta Georgia's nonprofit hospitals defending tax breaks Chattanooga Times Free Press |
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2011 Legislative Session Information:
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