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This Week in the Georgia Legislature |
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| House and Senate Calendar
The House and Senate are scheduled to be in session Monday through Friday of next week for the 34th through 38th legislative days. They are scheduled to be out of session the week of April 4, and back in session on Tuesday, April 12 for the 39th legislative day. The General Assembly is scheduled to Sine Die (40th legislative and last day) on Thursday, April 14. |
| Fiscal and Tax Policy
Tax Reform on the Move
The Special Joint Committee on Revenue Structure met on Thursday to outline their proposal for tax reform. The committee substitute to the Council's recommendations will likely include the following:
- 4.5 percent income tax rate, a limit on itemized deductions, and a low income tax credit;
- Sales tax on casual sales of cars, boats, and aircraft, as well as on automotive repair services;
- Sales tax exemption on energy used in manufacturing, mining, and agriculture; and,
- Communications services tax to replace existing franchise fees and other related taxes.
The proposal does not include putting the state sales tax back on groceries, as recommended by the Council. It also leaves the corporate income tax rate at 6 percent, leaves most services untaxed, leaves the tobacco and motor fuel tax rates untouched, and leaves exemptions and credits as is.
The bill is revenue neutral, according to comments by committee members. In contrast, the Council's proposal would have raised $500 to $970 million, depending on the state and local split of certain revenues.
Georgia is in a fiscal hole. The state faces a serious structural deficit even after the economy fully recovers due to its outdated tax system. In hitting a "revenue neutral" target, legislators should consider whether they would like this proposal to be revenue neutral to the hole in which we currently find ourselves, or revenue neutral to a trend line that doesn't include the worst recession since the Great Depression.
The proposal will move swiftly through the process and cannot be amended. Prior to releasing the bill from committee on Monday, lawmakers should take a hard look at whether other items such as additional services or cigarette taxes should be included. These additional provisions could ensure Georgia is revenue neutral to a good year, as recommended by the Council, rather than a year that will see us continue to cut school days, increase class sizes, and put off needed business-attracting investments in the state's infrastructure.
Revised "Adding Up the Fiscal Notes" Available
The House passed fewer tax bills this year than usual; however, three tax bills will cost an estimated $93 million in FY 2012 if passed by the Senate, according to the official fiscal notes for the bills. The revised policy brief from GBPI includes provisions from HB 168 that were not included in the policy brief released on March 21 Download the REVISED policy brief.
As these bills move to the Senate, tax breaks should be brought into the discussion of how we prioritize our limited state resources. Download GBPI's fact sheet for more information. |
| FY 2012 State Budget
Process
The House of Representatives passed their version of the FY 2012 budget (HB 78) by a vote of 132-33. The Senate Appropriations Committee is expected to vote on the Senate version of SB 78 on Monday, with the bill heading to the full Senate on Wednesday. HB 78 as proposed by the governor contains more than $500 million in additional cuts as compared to the FY 2011 budget. Total budget cuts since FY 2009 equal $2.9 billion. The House version of HB 78 closed an additional $250 million shortfall in the State Health Benefit Plan as well as restored some of the governor's recommended cuts. Highlights for the House of Representatives' budgets for the Department of Human Services, Department of Community Health, and the education agencies are contained in the fact sheets below: Analysis of the governor's original proposed budget are below: |
Education Bills that Have Passed the House and Senate
HB 172 - Extension of multiple flexibility provisions
House Bill 172 extends the date by which school systems must decide whether to request increased flexibility or remain status quo. By June 30, 2015 school systems must decide whether to become a charter school, enter into an Investing in Educational Excellence partnership with the state, or remain in status quo form. Furthermore, this extension pertains to flexibility in maximum class size requirements and to certain expenditure control waivers related to earned state funding. HB 172 has been referred to the Senate Committee on Education and Youth.
HR 495 - Creates Joint Higher Education Finance Study Committee
House Resolution 495 creates a Joint Higher Education Finance Study Committee to study the funding formula for the University System of Georgia and higher education funding. The committee would undertake a comprehensive study and evaluation of the cost and resources needed to educate a child through a review of the core issues relating to higher education financing and by evaluating the various components of the funding formula. The committee would consist of 14 members and would report its findings and recommendations to the General Assembly and the governor, with suggestions for proposed legislation, by December 31, 2011.
SB 119 - Revises provisions for Tuition Equalization grants
Senate Bill 119 extends the period for which a private higher education institution, which was previously accredited but currently working to regain such accreditation, is considered an approved school from seven to 11 years. In addition, SB 119 deems an eligible high school for HOPE scholarships and grants to include schools that were accredited within the previous two years between July 1, 2011 and June 30, 2013. SB 119 has been referred to the House Appropriations Committee. |
Unemployment Insurance Update
Georgia's unemployment trust fund is insolvent in part due to continued employer state unemployment insurance (UI) tax breaks. Read GBPI's brief for more background information: Georgia's Unemployment Trust Fund: More than $600 Million Owed to the Federal Government.
Legislation being considered this session will not put Georgia on the path to solvency.
HB 292 - Employment security; extend rates and credits; change certain provisions
Following a three year tax holiday, from 2002 forward, Georgia policymakers passed legislation to suppress employer state UI tax increases that would have built back the unemployment trust fund. HB 292 continues to suppress the automatic overall rate increase through 2012, but gives the DOL commissioner discretion to increase the overall rate by a maximum of 50 percent (an increase over last year's maximum of 35 percent), a discretion which the former DOL commissioner never exercised.
HB 292 also contains provisions that keep employer standard state UI tax rates level for the next five years. Under current law, new employers were scheduled to pay an increased state UI tax rate of 2.7 percent (up from 2.62 percent) beginning in 2012; however, HB 292 suppresses that increase for five years. Also, HB 292 would suppress the scheduled increase in the employer state UI tax rates until after December 31, 2016.
Suppressing the surcharge and keeping employer state UI tax rates level for five years will not move the unemployment reserve to solvency.
This bill passed out of the House on Monday, March 14 and passed out of the Senate Insurance and Labor Committee on Wednesday, March 23, 2011 without amendments.
Fix still needed to continue unemployment benefits for 22,000 Georgians
A small technical fix is needed to continue federally funded unemployment extended benefits for 22,000 Georgians each week. Georgia currently receives $29 million per month from the federal government for this program. The most recent federal extension legislation continues these benefits through 2011, and may be extended again. However, the legislation changed the qualifying formula to determine which states meet the high unemployment threshold, providing a more generous three year lookback in place of the two year lookback. Without adopting this new formula, Georgia would lose out on approximately $175 million from July through December 2011, which would not only sustain workers unemployed due to no fault of their own, but would provide a boost to local economies across the state. This fix was not included the HB 292 that passed out of Senate Insurance and Labor Committee. |
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Health Care Legislation
Several health care bills that address a wide variety of health care issues were passed by their originating chamber before crossover day. Key bills that are still alive in the 2011 session are listed below.
Private Insurance Regulation
HB 47 is similar to legislation introduced in recent years to allow health insurance companies to sell health insurance products licensed in other states. This bill would allow Georgia insurers to offer policies they currently offer in other states, even if those policies do not cover services required under Georgia law. The bill has passed the House and is assigned to the Senate Insurance Committee.
SB 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 assess the effect of mandated benefits taking into account the costs and impact of treatment and the cost savings to the health care system. This bill has passed the Senate and has been favorably reported from the House Insurance Committee.
State Health Care Programs
HB 214 would create a new state Department of Public Health as a separate cabinet-level agency reporting directly to the governor. This bill implements a recommendation by a special commission created to help guide the long-term structure of the state's public health activities; it has passed the House. The bill has been favorably reported from a subcommittee of the Senate Health and Human Services Committee, and now awaits action by the full committee
SB 63 has undergone significant changes since it was originally introduced, though the goal of the bill to reduce provider and consumer Medicaid fraud is still the same.
The version of the bill that passed the Senate would direct the Department of Community Health to conduct a pilot program to develop a new Medicaid smart card to be used to verify eligibility and identity at the point of service. This version no longer requires the pilot program to include biometric finger imaging.
The current bill gives the agency more flexibility in crafting the pilot program and in deciding whether to implement the program on a statewide basis.
A fiscal note was prepared on the original version of the bill, and estimated only a portion of the costs of the proposal. In particular, the costs of the new cards and other equipment was estimated to be $575,000 and $600,000, for a three- or six-month pilot program, respectively. These costs would total $23.2 million in the first year, with ongoing annual costs expected to be at least $3.2 million.
Additional costs for computer and information system upgrades could not be estimated; however, these costs could be significant.
The fiscal note was unable to forecast potential savings because of the difficulty in estimating what portion of existing fraud could be curtailed by this program as well as the potential for new types of fraud that can arise with new technologies.
The bill has passed the Senate and is assigned to the House Health and Human Services Committee.
Affordable Care Act
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 that did not make it past crossover day.
One notable bill that did not survive was HB 476, which would have created the Georgia Health Insurance Exchange Authority as the governing body for the state health insurance exchange required under the Affordable Care Act. The governor has indicated that he will use executive authority to create an advisory committee to study the issue and make recommendations to the state on how to proceed. |
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One Year Later and the Affordable Care Act is Still a Good Deal for Georgia
This week marked the one-year anniversary of the Patient Protection and Affordable Care Act. Since its passage, several provisions have gone into effect, including eliminating pre-existing conditions exclusions for kids and allowing young adults to stay on their parents' insurance until age 26.
As the nation marked the one-year anniversary, confusion surrounding the law continued. In this week's commentary, Senior Health Care Analyst Tim Sweeney demystifies common misperceptions of the Affordable Care Act.
Click here to read the commentary. |
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Noteworthy
The House of Representatives voted to pass House Bill 322 -- a sales tax exemption renewal for jet fuel. The bill, among other actions, continues a $20 million special interest tax break for Delta Air Lines. Larry Peterson with the Savannah Morning News takes up this issue in his column titled, Corporate campaign cash accompanies bid for Georgia Tax breaks. Click here to read the article.
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2011 Legislative Session:
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GBPI's Latest Analysis
FACT SHEETS:
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