The longest legislative session in Georgia’s history adjourned on April 29th. Dominated by budget reductions, tax and revenue policy debates, and education and transportation issues, it was a difficult and mostly painful session for progressive change as extensive cuts were made targeting education, health and social service programs. After nearly a week of negotiations [1] in the House and Senate Budget Conference Committee, an agreement was reached on the $17.8 billion state budget just hours before the legislative session was scheduled to adjourn.
Budget, Tax and Revenue: Even with the lingering recession causing a record decline in revenues [2], the legislature enacted long-term tax cuts at a rate of $624 million per year, disregarded other revenue options and shifted tax burdens on to middle class and low income Georgians.
HB 1023 [3] includes a three year tax break [2] primarily for Georgians in the top five percent income bracket and the elimination of the corporate net worth tax that, when fully implemented, will wind up costing the state $350 million in annual revenue losses. HB 1069 [4] includes a new tax credit for investors [2] and gives them the rollover ability to apply unused credits to future taxes. Adding to tax benefits for the wealthy, HB 1055 [5] does away with the tax on retirement income for Georgia’s wealthiest seniors and will drain another $150 million away from state revenues.
Having slashed taxes on the wealthy, HB 1069 [4] turns around and increases the tax burden on the poor by eliminating the refundable portion of the Low Income Tax Credit, reducing its intended goal of offsetting sales taxes paid by working families. Essentially, while the wealthy can offset excess income with tax credits, those under the $20,000 income threshold are prevented from offsetting sales taxes paid with income tax credits.
The General Assembly took some positive steps [2] in addressing the immediate $5 billion budget deficit by adding nearly $375 million in new taxes and fees [6], with $200 million in new revenue from a temporary 1.45 percent tax on hospitals and more than $90 million from a series of increases in fees on items such as court filings, mortgage lender fees, license plates and professional licenses. Improvements in tax collections and transparency (SB 206 [7] and HB 1284 [8]) were also passed along with HB 1405 [9], creating of an 11 member 2010 Tax Reform Council that will study and recommend changes to the state’s tax structure.
June 8th marks the deadline for the Governor to sign the remaining budget bills which if enacted threaten to deprive future state budgets [10] of much needed revenues.
Government Transparency: SB 206 [11] will increases transparency to government decisions about tax credits and exemptions by creating a “tax expenditure budget,” identifying the cost of all such policies. SB 389 [12] requires the State Department of Audits to post state budgets, agency salaries and expenses, consultant expenses and other financial disclosures on internet. SB 374 [13] creates the Legislative Economic Development Council for evaluating the state’s economic development strategies, review state funded activities and expenditures and oversee the effectiveness of such strategies, tax incentives and credits, etc.
Transportation: The 2009 transportation funding bill that died in conference committee during last year's session served as the catalyst for passage in this session of a compromise version of the Governor’s 2010 transportation funding bill. HB 277 [14] will provide for the development of 12 regional plans for transportation and transit funding needs. It also lifts the restriction on the use of capital versus operating expenses for the Metropolitan Atlanta Rapid Transit Authority (MARTA) tax revenues for three years and reduces the size and composition of the MARTA Board. The bill also creates a Transit Governance Study Commission for the Atlanta Region with legislators and local representatives joining together to address the potential for developing a regional transit system.
Health Care: Although resolutions to amend the state’s constitution to block the federal health reform law’s individual and employer mandates failed in the legislature, a bill that included a provision prohibiting mandatory participation in any federal health care system was passed on the last day of the session. SB 411 [15] was originally written to allow health insurance plans to include wellness and health promotion programs that provide rewards or incentives for Georgians involved in good health and preventative measures. A last-minute House amendment added the language of the failed SB 317 [16] to the "Healthy Georgians Act" to nullify federal health reform. Legal challenges to the passage of SB 411 will likely be made if the Governor decides to give the bill his signature.
Good news came in the form of HB 948 [17], approved as part of the budget package authorizing a $1.25 million Medicaid demonstration waiver to fund family planning services, and in the process generating a 90% federal match. The primary goal of this demonstration waiver is to lower the number of low birth weight babies. But simultaneously, access to health services was also curtailed, by reducing funds for the Babies Born Healthy [18] program, increasing premium payments for Peach Care [19], slashing $6.8 million from County Health Departments and putting an end to maternal health education and training programs.
One failed conservative health care measure (SB 407 [20]/HB 1184 [21]) would have allowed interstate sales of health insurance and in the process circumvented consumer protections required for in-state insurers under Georgia law.
Education and Childcare: The Georgia Legislature added 2,000 slots [22] to the lottery funded Georgia Pre-K program ($14.3 Million) but did so at the expense of cutting resource coordinator grants that funds social workers who provide supportive services to low-income families.
But a brutal budget axe fell on the state’s educational system as lawmakers made 13-15% across the board cuts [23] impacting public schools, universities and technical colleges. The fallout of these dramatic cuts is that per student state spending on K-12 education will fall to its lowest level in a decade, even with the use of Recovery Act funds. There will be larger class sizes [23], salary cuts, potentially thousands of teacher layoffs, the use of more higher education adjunct faculty and reduced supportive services. In response to the current cuts, some school boards have already moved to a K-12 four-day school week or have shortened their school calendars from 180 to 160 days.
The state’s Quality Basic Education Funding Formula [24], the method by which state funds are allocated to local school systems, realized a $527 million cut in state funds matched by a $272 million cut in federal funds for a total loss of $800 million [23]. Other spending cut targets included the elimination of National Board Certification salary increases for certified teachers, cuts in school nursing, preschool disability and nutrition programs.
Progressives were able to defeat several right-wing anti-abortion and anti-immigrant measures:
- Abortion: Anti-abortion companion bills, SB 52 [25] and HB 1155 [26], would have subjected physicians and other providers to criminal penalties for providing abortion services.
- Immigration: Two anti-immigrant measures were defeated this legislative session. SB 67 [27] would have imposed an English-only driver's license test, marking the third consecutive year this legislation was defeated. If it had passed, Georgia would have become the first state to impose such a restriction. SB 385 [28] would have rewarded select Georgia counties with millions of state dollars if they entered into 287(g) agreements [29] with the US Immigration and Customs Enforcement division of the Department of Homeland Security. These agreements allow local and state law enforcement officials to enforce federal immigration laws.
Notable bills that did not pass included HB 37 [30], the Parent Protection Act, which would have required employers to provide up to 24 hours per year of either paid or unpaid leave for workers to attend a medical appointment for the employee or the employee's spouse or child; accompany an aging relative to a medical appointment; or attend their child’s school conference and HB 935 [31], which would have created a commission to develop a comprehensive plan to reduce extreme poverty in Georgia by half by 2015 by addressing issues of access to affordable housing; adequate food and nutrition; affordable and quality health care; quality education and child care and opportunities to engage in sustainable work that pays a living wage.
Resources:
Georgia Budget and Policy Institute [32]
Georgia Political and Policy Digest [33]
Voices for Georgia's Children [22]
Progressive States Network- Secret Deportation Quotas, Program Failures and High Budget Costs from Local Immigration Enforcement Revealed in Recent Reports [29]
Georgia Legislative Watch [34]
Atlanta Constitution Journal - Legislature Reaches Deal on 17.8 Billion Dollar Budget [1]