Crossover Day 2022: Strong Health and Economic Legislation Cross Over, But Dangerous Tax Threat Remains

Yesterday, March 15, marked Crossover Day 2022, the day by which a bill generally must pass out of its legislative chamber of origin to be considered by the other chamber this session. Several important bills passed out of their chamber and are now eligible to be approved before Sine Die, the end of Georgia’s Legislative Session. Sine Die is scheduled for April 4.

Georgia’s General Assembly convenes for only 40 days each year (unless there is a special session), and the choices lawmakers make between now and Sine Die will affect every Georgian. These decisions will dictate how well-resourced our public education system is, what supports are offered to families with low incomes, who can afford a higher education, which health services are available in communities throughout the state and more. To fulfill their obligations to their constituents, lawmakers must support policies that not only help families make ends meet, but advance prosperity in every community, and reject proposals that cut into our state’s ability to do its job.

Key Legislation Crossing Over

The Budget(s)

Each year, the General Assembly is tasked with passing a budget. What the state prioritizes and how the money is spent serves as a statement of Georgia’s priorities and values. The House passed both the Amended Fiscal Year (AFY) 2022 and full Fiscal Year (FY) 2023 budget. The FY 2023 budget would restore funding to pre-pandemic levels and add crucial supports for postpartum Medicaid expansion, pay raises for state employees and teachers and additional funding to remove the Special Institution Fee at state colleges and universities. However, the budget, as passed by the House, does not address rising costs of goods and services, and lawmakers are considering costly flat tax legislation that would put the state’s future revenue-raising capacity at risk.

Although the year-over-year funding increases in the FY 2023 budget mark a positive step forward, much remains to be done to address the consequences of persistently underfunding core areas of the government such as Georgia’s public education system, which has reinforced systemic barriers to economic opportunity that prevent many Georgians from participating in the state’s prosperity. This trend of underfunding has reinforced inequities faced by people of color and Georgians with low incomes, and future increases must be targeted to directly address these gaps.

Moreover, last year the federal government approved $4.9 billion in flexible funding for Georgia. Right now, that money sits in the governor’s office and most of it remains unspent, but Georgians prefer he release the funds to be appropriated in a transparent way.

Revenues

At a time when leading Georgia lawmakers have the option to better fund core services that promote economic opportunity or enact broadly popular tax cuts for low- and middle-income Georgians, they are instead choosing to advance legislation that would primarily cut taxes for the wealthy while threatening future funding for public education, health care and more.

HB 1437 would further rebalance and skew the tax code in favor of the wealthiest due to the package’s proposed flat personal income tax rate. Although certain provisions of the legislation—such as raising the standard exemption offered to all taxpayers and eliminating most itemized deductions for personal income taxes—would offer positive benefits to Georgia families if isolated, the package tilts significantly toward top earners because of the inclusion of a flat tax that increases the legislation’s cost by approximately $645 million annually. Due to historic and systemic policies that have contributed to lower levels of income and wealth for Black and Brown Georgians, this proposal would worsen racial inequities and expand the racial wealth gap.

The package would also cost over $1 billion a year—or more than Georgia spends on the entire Department of Human of Services, the state’s ninth-largest agency, each year. Although there are some aspects of HB 1437 that would improve Georgia’s tax code, the bill is made unnecessarily costly and regressively harmful by the inclusion of a flat tax. Lawmakers must eliminate the flat tax and focus on enacting tax measures that rebalance the tax code, such as seeking opportunities to raise revenue and including an Earned Income Tax Credit (or Georgia Work Credit) that would put money in the pockets of Georgia’s low- and middle-income families.

Another risky bill that crossed over is HB 500, which seeks to create a program known nationally as CAPCO but dubbed the Georgia Agribusiness and Rural Jobs Act (GARJA) credit. The bill would authorize $60 million in funding to finance an expensive tax credit program that operates through state-sponsored quasi-venture capital funds. CAPCO has been advertised as a job creation incentive, but the program has failed and been discontinued in all other states where versions have been implemented.

Last year GBPI released a bill analysis of House Bill 587 which also sought to grow the GARJA program. This analysis, though based on a previous version of the bill, highlights how the state assumes most of the risk from funding GARJA’s investment schemes and how the effects of the program should be evaluated based on its long record of failing to live up to lofty promises of rural job creation, rather than the current evaluation system of self-reporting with little to no accountability. In December 2021, the Georgia Department of Audits and Accounts conducted an audit of the GARJA program. The audit found that it would take at least 72 years for Georgia to see a positive return on its $60 million in program funding, and confirmed that CAPCO programs have failed and been discontinued in all other states where versions were implemented. Only one business relocated to Georgia from another state to participate in the GARJA program. Most of the state’s counties were ineligible investment locations for the program, and only 23 of Georgia’s 159 counties (14 percent) received any investment.

Education

Crossover Day saw positive movement in the education space. First, lawmakers in the House voted for HB 1435, which would create a need-based completion grant for college students. The bill makes students with a “financial aid gap,” defined as the “amount remaining after other funding… for the cost of attendance,” eligible for grants. These students are eligible in addition to those who are “economically disadvantaged,” which has yet to be defined. The Georgia Student Finance Commission (GSFC), the state agency that would administer the grant, would determine more specific criteria.

Hours later, the Senate voted against SB 601, a dangerous voucher bill that would send public dollars to unaccountable private schools at the expense of public education. Unfortunately, while SB 601 failed, another voucher bill, HB 517, is still moving. It crossed over in 2021. However, the Senate recently disagreed with a House amendment to the bill, which would double the size of an existing voucher program. The House and Senate may still reach an agreement. Over the last 21 years, Georgia has only fully funded public education twice. Rather than undercutting our public school students, lawmakers should seek opportunities to better support public education, as the state is constitutionally required to do.

Health

Although lawmakers still failed to pass the most comprehensive option to support health care access—Medicaid expansion—several bills advancing health and wellness in the state did cross over. Senate Bill 338 recently passed out of the state Senate and would allow new parents to receive Medicaid coverage for one year after giving birth.  Georgia currently provides Medicaid coverage for up to six months postpartum; however, more than 1/3 of pregnancy-associated deaths in Georgia—a majority of which are preventable–happen during the time between six months to one year postpartum. Extending comprehensive postpartum care to a full year postpartum is an important part of preventing maternal mortality. Georgia ranks no. 49 among states for the rate of maternal mortality, defined as deaths related to pregnancy that occurred during or within one year of the pregnancy or birth. The maternal mortality rates for Black women in Georgia were three to four times higher than for white women.

Bipartisan legislation supporting behavioral health parity and expanded behavioral health care in Georgia crossed over, too. Among other provisions, HB 1013 would require insurers to cover treatment for behavioral health (including mental health conditions and substance use disorder) the same way they cover other forms of health care.

The House also advanced HB 1192, which requires the state to submit a waiver for Medicaid coverage for low-income individuals living with HIV, and HB 1404, under which the Department of Community Health to apply for federal approval to authorize private institutions for mental disease to qualify for Medicaid reimbursement.

Economic Justice

The Legislature advanced a mixed bag of policies related to economic mobility. SB 379 establishes a program for the State Board of the Technical College System of Georgia (TCSG) to create and expand registered apprenticeship programs in the state. This bill will help Georgia workers get experience in a field that may help them grow their wages. HB 1390, which provides protection against harassment to city and city government employees, also passed out of the House. If passed by the Senate, this bill will help ensure that employers respond properly to harassment and discrimination claims and do not retaliate against employees who complain of harassment. The bill also helps ensure that employees have standard legal options when they do face harassment and/or discrimination while also promoting prevention.

However, lawmakers also advanced SB 331, which would ban local governments from passing laws related to work hours or scheduling. Preemption laws—those, like SB 311, that ban local policy change—often harm workers with low wages because those jobs are less likely to offer protections like predictive scheduling, where a worker knows in advance when they may be called to work.

Legislation that would slightly address the overreliance on fines and fees, which punish Georgians for living in poverty, passed on Crossover Day. SB 353 creates judicial discretion in the suspension of a driver’s license when the driver fails to appear in court for certain traffic violations. Allowing judicial discretion in license suspension would provide minor relief to many Georgians with low incomes who often experience spiraling hardships when facing driver’s license suspension, including transportation barriers to gaining or maintaining employment, which leave them unable to afford reinstatement fees and often force them into impossible choices that lead to incarceration. Abusive fines and fees practices and lack of protections for Georgians in deep poverty have disproportionately harmed Black and Hispanic Georgians long before the pandemic and worsened in many localities during a pandemic that has been most unforgiving to low-income communities.

Looking Ahead

The above bills must still pass through one more chamber before becoming law. Lawmakers should evaluate the bills that cross their desks before Sine Die to ensure they are enacting policies that meet the needs of the people.

This is the second of a two-year session, which means bills that do not cross over cannot be considered again. However, lawmakers are able to introduce new proposals for 2023 that can include similar language. Lawmakers can also append the language from bills that haven’t crossed over to other, relevant legislation.

GBPI will advocate for movement this year or next on other priorities, including:

  • Passing a state-level Earned Income Tax Credit, the Georgia Work Credit, which would reduce the amount of income tax owed by low- and middle-income families
  • Restructuring Georgia’s cash assistance program, also known as Temporary Assistance for Needy Families, by eliminating racist barriers that prevent families in deep poverty from accessing and keeping cash aid.
  • Fully expanding Medicaid to cover nearly 500,000 Georgians.
  • Creating a need-based financial aid program.
    • Advocating for the expansion of access to driver’s licenses for all Georgians regardless of legal status.
    • Deprioritizing spending increases in law enforcement, jail and prison construction, instead funding alternative strategies to further rehabilitate, reintegrate and preserve criminal legal system-involved Georgians within the workforce.

A full list of GBPI’s policy priorities is available here.

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