The state would face a huge dilemma under the Ryan plan: spend more of its own money to make up for the federal cuts; deny health insurance to thousands of people; cover fewer services; dramatically reduce payments to doctors, hospitals and other providers; or some combination of all those options. Either way, Georgia would suffer.

Medicaid is now a state-federal partnership that works to Georgia’s advantage. Federal funds will cover nearly 66 percent of Georgia’s Medicaid costs in the coming budget year. Georgia’s $2.5 billion investment will bring in nearly $5 billion in federal dollars.  Moreover, as health care costs rise or more people require care, such as during the recent recession, the federal share grows to keep pace.

All of that would change under Ryan’s plan. The federal government would provide Georgia with a fixed dollar amount – called a block grant — instead of a percentage share of actual costs, and the state would be responsible for the rest.

Over time, the money that Georgia would get from the federal government would fail to keep up with rising health care costs or Georgia’s aging population, falling farther and farther behind need with each passing year.  More and more of the costs would be shifted to the state.

Georgia is already very frugal with Medicaid. In 2009, it spent less per patient than all but one other state. Turning Medicaid into a block grant would entrench this low investment and make improving the program more costly. For example, Georgia would have to cover the entire cost of increasing payments to doctors, hospitals, and other providers, as federal funds would no longer match the state’s investment.

Georgia is home to nearly 2 million people without health insurance, the fifth-largest total among the states.  Any substantial cuts in federal Medicaid funding would further limit the state’s ability to help Georgians who lack private coverage and prompt policymakers to make it even harder for many of Georgia’s seniors, children, and people with disabilities to get the care they need.

State leaders have already cut nearly $2 billion in spending since before the recession, a truly massive blow to the state’s economic health and Governor Deal has signed four bills into law that will create an approximately $85 million shortfall in the next two fiscal years. Although some of the policy changes enacted through the omnibus package appear likely to increase state revenues in the long-term, which could help shore up Georgia’s finances and improve its economy in future years, Georgia still faces a long road to repairing the damage from the Great Recession. Despite the small-scale “reforms” enacted this session, the state still needs comprehensive tax reform that includes new revenues. Download the PDF.

Examining HOPE awards across household incomes, by institution, and factoring in tuition costs provides a telling picture of the distribution of HOPE dollars.

The majority of HOPE awards go to students from households with incomes of $100,000 or less. However, a disproportionate share of HOPE dollars fund scholarships for students from households with incomes of more than $100,000 attending more costly public research institutions and state universities. Download the Fact Sheet.

GBPI Executive Director Alan Essig is quoted on FY2013 state budget.  Click here for full article.

GBPI Executive Director Alan Essig believes Governor Deal’s 2013 budget maintains the status quo in Georgia and does not do much to boost  the state’s overall economy.  Essig is quoted in the full article.   

GBPI Executive Director Alan Essig comments on Governor Deal’s decision to veto expenses for two capital projects in the fiscal 2013 state budget.  Read full article here.

GBPI Executive Director Alan Essig discusses bonds and special projects and how politics influence which pets projects receive funding.  Essig calls bonds “the way they reward folks” in the Legislature.  Read full article here.

Posted by Clare S. Richie

Next week, the House of Representatives is expected to pass deep cuts to the Supplemental Nutrition Assistance Program (SNAP) – previously known as food stamps. 

Every Georgia family that participates in SNAP would see their food assistance eliminated or cut.  Children, seniors, and people with disabilities would be among the hardest hit, along with low-income working families. 

SNAP’s modest benefits — about $1.50 per person per meal — help many struggling Georgia families put food on the table.  And, SNAP has a strong, decades-long track record of fighting poverty effectively and efficiently. One reason for SNAP’s success is that it responds quickly when a recession hits and people lose their jobs.

Virtually the same number of Georgians are living in poverty ($23,050 annual income for a family of four) as those receiving SNAP benefits. Participation increases during economic downturns and declines as the economy improves – with the average household staying on the program less than a year.

Cutting SNAP will push families further into poverty – unemployment rates are still high and for millions of families it’s hard to make ends meet.  These cuts would also put a drag on Georgia’s economic recovery. The USDA reports that every $5 in SNAP benefits generates $9.20 in total community economic activity as a result of recipients spending SNAP benefits quickly and locally.

The House Agriculture Committee recommends more than $33 billion in additional cuts to SNAP over the next decade on top of the $133.5 billion that the House has already taken away from the program. Some members of Congress claim that there’s no alternative.  That’s false.  Rather than target SNAP, they could cut back on the nation’s wasteful farm subsidies, three-quarters of which go to the largest most profitable commercial farms. 

Cutting the nation’s most important anti-hunger program – which helps nearly two million Georgians – just doesn’t make sense.

May 3rd, 2012 Posted to Blog, Clare S. Richie | Comments (1)

Posted by Wesley Tharpe

Last week, Governor Deal announced a seemingly major development on Georgia’s job front:  Baxter International, a large biomedical company, has agreed to open a new facility here that will create 1,500 jobs over the next ten years. In exchange for the investment, Georgia’s taxpayers will provide the company with more than $210 million in state and local incentives, such as tax exemptions and credits. Although there are some drawbacks to enacting large business incentives, they can make sense in some cases as long as they’re transparent and accountable.

So, what does this Baxter deal mean for the state’s economy? There’s more to the story…

Even though 1,500 new jobs sounds like a lot, it’s actually a pretty small number in the grand scheme of things. As described in our recent Jobs Count report, Georgia shed 339,000 jobs during the economic downturn (December 2007 to February 2010) and has gained back only 97,000 since. This leaves around a quarter million jobs that Georgia still needs to create, and that’s before accounting for the new residents moving here. The state’s combination of jobs previously lost and those that must be created to keep up with population growth – referred to as the “jobs deficit” – stands at 414,800 jobs as of March 2012 (see chart). To make up that deficit and return to pre-recession levels of employment by 2015, Georgia would need to create around 15,000 new jobs each month for the next three years.

This isn’t to say that large projects like Baxter are irrelevant, but that they’re only a small piece of the economic puzzle. Policymakers in every state tend to focus on landing the next big company (sometimes referred to as “smokestack chasing” or “ribbon-cutting deals”), but the stark reality is that most jobs are not created in this way. Compared to the needed 15,000 jobs a month, 1,500 jobs over a decade are only a drop in the bucket.

Filling that bucket requires a broader approach to economic development, one that emphasizes positive investments in Georgia’s people and quality of life. Successful states require a mix of ingredients to succeed, and Georgia lags behind on certain key ones. The state’s low taxes and minimal regulations make it one of the most business-friendly places in the country, but its subpar performance on things like education hold it back. The companies and workers of today need world-class education systems, functioning transportation networks, and a range of amenities like parks and cultural centers, which make the state an appealing place to live and work.

Truly recovering from the Great Recession will require a more comprehensive approach to economic growth, defined by forward-looking investments in Georgia’s workforce and infrastructure and a tax system that generates sufficient revenue to pay for them.

May 2nd, 2012 Posted to Blog, Wesley Tharpe | Comments (1)

GBPI Executive Director Alan Essig is quoted on Baxter plant incentives issue and whether or not it is beneficial to the state.  Read full article here.