Sine Die 2020: More Work Needed to Address Georgia’s Revenue Crisis

After a three-month hiatus due to COVID-19, the 2020 legislative session ended Friday, June 26When lawmakers returned in mid-June, the world had shifted. A steep revenue shortfall, high levels of unemployment, an ongoing public health crisis and a global anti-racist movement underscored the long-standing truth that the status quo could not advance prosperity for all Georgians. By the end of legislative session, known as sine die, lawmakers had taken some positive steps to create a stronger Georgia, but more must be done to foster a state government that truly serves all our people.     

Funding Georgians’ Priorities 

Before COVID-19, Georgia leaders called for steep cuts to nearly every service and program funded by the state government. The pandemic complicated budget negotiations as it led to a revenue shortfall spurred by layoffs and furloughs, and the state called for even steeper cuts to health, education and other services and programs meant to improve the lives of Georgians.  

In total, the final budget contained $2.2 billion in cuts—nearly half of which are cuts to the state’s K-12 education funding formula. Other cuts reduce funding for mental health services, adult educationsubstance abuse treatment centers and public health. People of color and rural Georgians will be most harmed by these cuts. The budget legislation will soon be signed by the governor; the budget will go into effect on July 1, 2020.  

Building Healthy Communities 

Georgia ranks No. 49 among states for maternal mortality, meaning Georgia sees more deaths related to pregnancy that occur during or within one year of the pregnancy or birth than almost every other state. The rate for Black women is three to four times higher than that of white women. But this year, lawmakers passed a bill to extend Medicaid coverage to low-income Georgians for up to six months after giving birth and included funding for the program in the budgetAlthough one year of coverage is ideal, this measure will improve maternal mortality rates by ensuring access to comprehensive postpartum care. The bill awaits the governor’s signature; the plan must also be approved by the federal government.    

In spite of the steep budget cuts, lawmakers included new funding for Rural Hospital Stabilization grants. Lawmakers also restored funding to county public health departments, which originally faced steep cuts in initial proposals, and created new slots for community- and home-based service waivers. However, state leaders again refused to fully expand Medicaida vital and cost-effective tool to help address the health and economic crisis we are facing. 

Fostering Thriving Families 

At the beginning of legislative session, GBPI advocated for extending the eligibility for the Childcare Assistance Program Scholarship (CAPS), which helps families with low incomes afford child care, to bachelor’s degree seekers. Students previously only qualified if they were enrolled in an associate degree program. As a bill moved through the Legislature, the Department of Early Care and Learning, which administers the program, extended the eligibility on its own. 

However, lawmakers did not pursue the Georgia Work Credit—legislation that would create a state-level Earned Income Tax Credit to reduce the amount of income tax owed by working families.  

Educating our Youth 

This year, Georgia students did not take Georgia Milestones, the state’s standardized tests for K-12 studentsdue to the coronavirus. Georgia’s school ranking system, the College and Career Readiness Performance Index (CCRPI), relies heavily on these tests—but research shows Milestones scores correlate more with the incomes of students than with the quality of the school. Even if schools return to normal next year, students will take fewer Milestones tests thanks to SB 367, which passed unanimously. This bill, which now sits on the governor’s desk, eliminates five of 24 required Milestones. 

Another highlight of this session is a bill that did not pass. Lawmakers considered expanding the state’s private school voucher program for students with disabilities. Students who participated in the voucher program would have lost out on thousands of dollars of education funding, as well as key federal protections for students with disabilities.  

Strengthening the Workforce 

As the global pandemic led to layoffs and furloughs, strengthening the workforce became even more important. The Georgia Department of Labor made some improvements to Unemployment Insurance at the start of the COVID-19 pandemic. SB 408, which passed during the final days of session, extends a few new provisions so that some workers can receive unemployment benefits for a longer period of time and receive benefits while earning some money. 

Lawmakers also passed SB 288, which expandrecord restriction to support returning citizens seeking employment. Record restriction can boost economic outcomes for those who have been incarcerated, reduce recidivism and—because Black Georgians face higher incarceration rates due to disparate policing practices—help reduce racial inequities in our state. 

Legislation changing provisions related to Georgia’s popular Dual Enrollment program, which helps students earn college credit while in high school, also passedHB 444 aims to control costs for the wildly popular program. Students now have a 30-hour cap on courses the state will pay for. The program will also prioritize juniors and seniors and limits course withdrawals and retakes.

Building a Stable, Fair Tax System 

Although lawmakers left several options to raise revenues on the table this session, there were promising bills that passed. For example, lawmakers quickly approved HB 276, which collects revenues from so-called “marketplace facilitators,” such as retailers that list items on sites like eBay or Walmart.com. They also passed HB 448, which requires all lodging facilities, including those rented online through services like Airbnb, to collect and remit hotel and motel taxes. These measures will not bring in significant new revenues, but as consumers continue to make more purchases online, they can help stop the recent decline in annual sales tax collections.  

HB 1037, which requires film productions utilizing the Georgia film tax credit to undergo audits beginning in 2023, also passed and now sits on the governor’s desk. State estimates show that taxpayers will send $545 million in film tax subsidies to companies in FY 2021; the majority of benefits currently go to companies and workers outside Georgia. GBPI has called for the evaluation of special-interest tax breaks, as well as commonsense options to improve the film tax credit, like preventing the use of credits from being deferred for more than one year.  

One proposal that would have exacerbated our state’s budget problems did not pass. Legislation to enact a so-called flat tax, which would have cut taxes for the wealthy at the expense of low- and middle-income Georgians, stalled when session resumed.  

Looking Forward 

Georgia’s Legislature operates in two-year cycles; 2020 marked the last year of the cycle, which means all legislation that did not advance this year will need to be reintroduced for the 2021 session. Next year, lawmakers must finally take action to close shortfalls and fully fund our budget by raising new revenues. Legislation to raise the tobacco tax to the national average stalled in the Senate Rules Committee this year. Lawmakers should introduce new legislation in order to both improve Georgia’s public health outcomes and boost revenues. Lawmakers should also evaluate and trim back special-interest tax breaks such as the film tax credit, the private-school school voucher program and the $6 million rural health tax credit in order to more directly fund programs related to health, education and more. Finally, lawmakers should fully expand Medicaid in order to draw down federal dollars and provide more Georgians with health insurance and extend postpartum Medicaid to a full year 

By raising these revenues, lawmakers can fully fund critical programs for the FY 2022 budget that are meant to help Georgians recover from the effects of COVID-19 and prosper. Our state can improve the education funding formula to account for schools that serve students in poverty, make higher education more affordable and technical college tuition-free, increase access to health programs and ensure more funds flow to people of color and families with low incomes. To learn more about people-first policies to help Georgians prosper, see GBPI’s People-Powered Prosperity campaign. 

 

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