Sine Die 2019: Progress and Missed Opportunities for a People-First Agenda

The first legislative session under Gov. Brian Kemp and Lt. Gov. Geoff Duncan ended on Tuesday, April 2. Because Georgia’s General Assembly operates on a biennial legislative session, any bills that failed to advance this year will be reassigned to committee and available for consideration when legislators reconvene in 2020. Here are some highlights as GBPI tracks progress toward a people-first vision for the state.

Healthy Communities: A First Step to Expanding Health Coverage

Health coverage expansion was a top issue this year. The General Assembly debated waivers and Medicaid expansion all session long, culminating in the passage of Senate Bill 106, which the governor signed. The bill allows the Department of Community Health to explore Medicaid 1115 waiver options for Georgians with incomes up to 100 percent of the federal poverty threshold and a 1332 state innovation waiver to make changes in the federal health insurance marketplace. It marks the first step in a long process to pursue health coverage for more Georgians.

To fund Medicaid, the legislature approved House Bill 321, a five-year renewal of the hospital provider fee. In FY 2020, the state expects to collect more than $310 million from the provider fee, which it will use to draw down more than $650 million in federal funds. HB 321 also includes new financial disclosure and transparency requirements for non-profit hospitals and a five-year extension of the state’s $60 million rural hospital tax credit. The tax credit began in 2017 and offers a dollar-for-dollar tax credit to individuals or corporations that donate to eligible rural hospitals. Under HB 321, the tax credit will expire at the end of 2024. The bill also requires the state health agency to post more information about the tax credit on their website, including monthly progress reports on contribution amounts.

Increasing state investment in substance abuse and mental health services was another priority going into session. HB 514 created the Georgia Mental Health Reform and Innovation Commission. The FY 2020 budget also included several increases for mental health services. The General Assembly also passed legislation reforming the state’s Certificate of Need regulatory process for health care providers (HB 186).

Lawmakers missed an opportunity to make critical investments in health and well-being by raising the state’s tobacco tax, the third lowest cigarette tax in the nation. Legislators filed several bills to increase the state’s 37-cent excise tax on cigarettes and begin taxing nicotine products like e-cigarettes. They will have an opportunity next year to pursue this proven strategy to reduce smoking rates and improve Georgians’ health.

Educated Youth: Yes to Teacher Pay Raises, No to Vouchers

One of the state’s most important responsibilities is to provide for public education. This legislative session saw large increases in education spending. The biggest ticket item was the $3,000 teacher pay raise. The budget continued full funding of the Quality Basic Education formula and included bonds for bus replacement. However, the budget continued the dangerous trends of dramatically underfunding school transportation. Lawmakers missed the opportunity presented in a healthy budget year to examine the state’s funding formula and how school districts can best serve students in its highest-need schools.

In addition to teacher pay, lawmakers debated changes to the Teachers Retirement System throughout the session. They decided to continue studying the issue but did not end up making any changes this year.

After vigorous debate, the General Assembly declined to pass new school vouchers or so-called “educational scholarships accounts” that would divert public money to private schools or other education service providers. GBPI provided updates and analysis on these bills throughout session.

Skilled Workers: College Students Get More Time to Qualify for HOPE

Postsecondary education and training help to build a strong workforce and empower Georgians to pursue economic opportunities. Building on HOPE scholarships, the General Assembly passed a measure to extend the time for college students to earn the HOPE scholarship from seven to 10 years after high school (HB 218). GBPI highlighted the issue and how the seven-year limit made college less affordable for many older college students.

After much discussion about reforming Dual Enrollment and curbing cost growth, the General Assembly did not pass legislation. Still, the FY 2020 budget cuts Dual Enrollment funding and allots a combination of state general and lottery funds that assumes a spending reduction achieved by several policy changes. GBPI will continue to monitor this issue.

Lastly, lawmakers missed an opportunity to expand targeted financial aid to technical college students and low-income students by funding need-based aid. Legislation enacting a Georgia need-based aid program began July 1 without funds appropriated to support it. The program remains unfunded without action from General Assembly.

Thriving Families: Bipartisan Progress on State Earned Income Tax Credit

Focused support for low and moderate-income working parents can help families make ends meet, save for a rainy day and invest in their children’s future. Lawmakers from both parties introduced bills this year to cut taxes for hundreds of thousands of families by creating a state Earned Income Tax Credit (EITC) that complements the federal tax credit. Though none of the bills made it to the governor’s desk, momentum grew for this important policy.

Child care affordability is critical to help parents work. The 2020 budget included a small $500,000 increase to the Childcare And Parent Services (CAPS) program, which provides child care subsidies to families. Though increased support is welcome, the depth of need requires a significant investment.

Modernize Georgia’s Tax Collections to Pay for People-First Investments

A sustainable, people-first approach requires the state to maintain a strong tax base and avoid expending revenue through the tax code with inefficient exemptions or loopholes. Some targeted exemptions from state taxes provide a good return on investment, but others come at a significant cost to Georgia taxpayers. As the state now forgoes $5 billion of revenue to offer a variety of exemptions and other expenditures through the tax code, it’s critical that Georgians can measure the return on investment of their tax dollars.

SB 119 and SB 120 formed a legislative package intended to increase transparency and accountability by directing the state auditor to conduct a 10-year economic analysis of any proposed tax bill or fiscal amendment. The legislation also directed the state auditor to conduct an economic analysis of the state’s full tax code on an annualized basis through 2025. As passed, SB 120 enables the chairs of the House Ways and Means committee and Senate Finance committee to each request up to three cost-benefit analyses of tax expenditures each year. Lawmakers removed the original language to require a review of the state’s tax code.

Lawmakers debated several measures to modernize taxes to catch up with technological innovations. One measure awaiting the governor’s signature, HB 182 lowers the sales threshold to $100,000 from $250,000 for online retailers to collect and remit sales tax. The statue auditor estimated this will increase state revenues by up to $3.9 million. But an effort to require “marketplace facilitators” (e.g. eBay, rideshare services) to collect sales tax in both retail and online settings failed to pass. The fiscal note estimated including these retailers in the tax code would increase state revenues by up to $86 million in FY 2020. Lawmakers also debated a flat 50-cent per-trip fee on rideshare services like Uber and Lyft or exempting ridesharing from taxes altogether. In the final hours, lawmakers considered these provisions in a comprehensive package of transit measures to create a new Department of Mobility and Innovation, dedicate funding toward developing a statewide transit system and clarify the process for regional referenda to approve transit funding. Lawmakers combined all of these measures in SB 200, which went to a conference committee that was unable to reach an agreement before Sine Die.

Finally, the General Assembly did not extend the existing sales tax exemption on jet fuel, which will expire at the end of this fiscal year. The state auditor estimated this exemption would reduce state revenues by up to $45 million in FY 2020.