State Revenues for the first seven months of this fiscal year are only running 4.5 percent ahead of the FY 2011 revenue collections, raising some doubt as to whether the Governor’s FY 2012 revenue estimate of 4.5 percent growth will be met. January revenues showed weak growth of only 0.7 percent, which followed the 1.2 percent decline in December. Every 1 percent shortfall in the revenue estimate equates to an approximate revenue shortfall of $173 million. The Revenue Shortfall Reserve contains only $328 million. Even if revenues pick up in the remaining five months of the fiscal year to fully fund the FY 2012 budget, it is questionable whether such growth will drive a surplus large enough to fund both the Education Mid-Year Reserve and increase the Revenue Shortfall Reserve.
The House and Senate will be in recess through Monday, Feb. 20. They are scheduled to go into session for the 22nd legislative day on Tuesday, Feb. 21, and stay in session through Friday, Feb. 24 (25th legislative day). The legislative calendar is set through Monday, March 12 (31st legislative day).
Amended FY 2012
The House passed the Amended FY 2012 budget on Friday, Feb. 3by a vote of 159-0.
The Senate Appropriations Committee is scheduled to take up the amended budget on Tuesday with the full Senate expected to act on the amended budget on Thursday.
FY 2013 Budget
Both the House and Senate are continuing to hold hearings throughout the week on the FY 2013 budget. Download the proposed budget.
Dowload FY 2013 Budget Analyses:
HB 319 has cleared the committee process and could be voted on by the House this week. The bill would restore certain sales and use tax exemptions that expired in 2011. Starting in July 2012 and running through December 2014, the new exemptions would apply to: federally-qualified nonprofit health centers; nonprofit volunteer health clinics (i.e. the 94 free clinics statewide); qualified food banks; food donated for disaster relief purposes; and for qualified job training organizations (i.e. Goodwill career centers).
HB 868, the lead piece of legislation stemming from Governor’s Deal Competitiveness Council, had its first hearing this week in the Income Tax Subcommittee of House Ways & Means. Aimed at reforming two of Georgia’s jobs tax credits, the bill would cost approximately $68 million per year according to the bill’s lead sponsor, Rep. Doug Collins. For additional information, download the HB 868 (LC 34 3275) Fact Sheet.
HB 890 had its first hearing before the Income Tax Subcommittee of House Ways & Means. It would create two new tax breaks related to the commercial use of natural gas, such as the construction of natural gas fueling stations for commercial trucks and taxis. While there is not an official fiscal note yet, the chairman of the committee estimated the new credits would cost $117 million over five years.
HB 920 would expand Georgia’s annual tax expenditure report to include a statement of each tax credit’s purpose and a cost-benefit analysis of whether that goal is being achieved (e.g. job creation). The proposed changes are aimed at strengthening lawmakers’ ability to analyze the effectiveness of tax expenditures. Sponsored by Representative Chuck Martin, the bill before the House Budget & Fiscal Affairs Oversight Committee with a vote expected on Tuesday.
HB 718, which would create a new $200 million program called “Invest Georgia,” appears stalled for the moment in the House Insurance Committee. Modeled on a similar program in Maryland, the bill is designed to increase Georgia businesses’ access to venture capital. For additional information, download the HB 718 (LC 34 3233S) Fact Sheet.
SB 402 would reform Georgia’s pension system to allow the state’s Employees Retirement Fund to invest in various “alternative investments,” such as venture capital and private equity. A maximum of 5 percent of pension assets could be invested in alternatives, and teacher pensions would be excluded from the reform altogether. The bill unanimously passed the Senate Retirement Committee on Thursday.
HB 48 has cleared committee in the Senate after already passing the House last year. It would enable counties, via referendum, to cut their inventory taxes (a taxes paid by businesses on their stock of goods) up to 100 percent. A similar measure passed in 2010 before being vetoed by Governor Perdue. Read more here: http://www.macon.com/2012/02/07/1894819/business-tax-cut-looks-likely.html
HB 811 would restrict legislators’ ability to divert the revenue collected from fees intended to fund a specific purpose (e.g. tire removal, police training). The bill would require legislators to appropriate the revenue from fees as intended, with some exceptions, rather than redirecting it to the General Fund. Read more here: http://www.macon.com/2012/02/07/1894820/bill-aims-to-direct-user-fees.html
HB 862 would expand the Georgia Qualified Education Expense Tax Credit, which allows individuals and companies to claim a credit against their income taxes in exchange for donating to qualified “student scholarship organizations.” HB 862 would enable companies to claim the credit against additional taxes beyond the income tax, such as alcohol or insurance premium taxes. As written, the bill would not change the program’s $50 million annual cap.
HB 824 makes changes to the state’s equalization grants program funding formula. The bill attempts to ensure that equalization funding is effectively directed to low-wealth school systems across Georgia. The house favorably passed the bill, which will now move to the Senate for consideration. For additional information, download the HB 824 Fact Sheet.
Drug Testing of Applicants for Public Assistance (TANF, Medicaid and UI)
Several bills have been introduced that require drug testing (mandatory or random) of adult applicants or recipients of Temporary Assistance for Needy Families, Medicaid, State Unemployment Insurance, and possibly other “state or state-administered federal public assistance”. The bills generally require the applicant or recipient to pay for the cost of the drug test, which is reimbursed if the test result is negative, using federal funds. These bills may not be constitutional (e.g., if considered suspicion-less searches) or may not be allowable under current federal law that governs public assistance (e.g., current unemployment law does not allow drug testing).
SB 292 – The Senate Health & Human Services Committee will discuss SB 292 on Monday, Feb. 20 at 1 pm in 450 CAP. The Senate Health & Human Services Subcommittee for Health Care Delivery passed a substitute to SB292 (by a 2-1 vote) on Wednesday, Feb. 15. This bill requires drug tests for approved TANF applicants and Medicaid applicants The substitute allows for a cotton swab test, only tests one parent, and does not delay benefits. In addition, the substitute states that “No testing shall be required… for any person who the department (DCH) determines is significantly hindered, because of a physical or mental handicap or developmental disability, from doing so. The bill now moves to the Senate Health & Human Services Committee for consideration.
SB 312 – The Senate Health & Human Services Committee will discuss SB 312 on Monday, Feb. 20 at 1 pm in 450 CAP.
HB 668– The Lane Subcommittee Judiciary Civil heard testimony on HB 668 on Wednesday, Feb. 15. At the conclusion of the testimony, the bill sponsor, Representative Spencer discussed possibly amending the bill to exempt certain people with mental disabilities and victims of domestic violence. No vote was taken.
HB 861 – The Lane Subcommittee Judiciary Civil will discuss HB 681 on Tuesday, Feb. 21 in 132 CAP. HB 861 includes drug testing of TANF applicants, random drug testing of TANF recipients, and drug testing of TANF recipients who have been arrested for drug related offenses. The bill language states that the Department of Human Services “shall establish a procedure by which law enforcement agencies may report arrests for drug related offenses.”
Proposed Transfer of Rehabilitation Services
HB 831 proposes moving the Division of Rehabilitation Services from the Department of Labor to the Department of Human Services effective July 1, 2012. The governor has included the transfer in the FY 2013 budget report. The House Human Relations & Aging Committee passed HB 831 after hearing testimony on February 2nd and February 6th. HB 831 is now in the House Rules Committee.
Proposed cuts to Unemployment Benefits
SB 447 makes drastic cuts to unemployment benefits and makes small changes to funding of the Georgia unemployment trust fund.
For the unemployed, who lost their jobs through no fault of their own, SB 447 would:
- Impose a waiting week to ban payment of unemployment compensation for the first week of unemployment (which in essence eliminates a week of unemployment benefits for half of recipients).
- Reduce the number of weeks a person could receive unemployment benefits. The bill would drastically cut the maximum duration of unemployment benefits from 26 weeks to a sliding scale of 12 to 20 weeks, which is less than any other state in the country. Georgia already has the lowest average duration of benefits of any state in the country.
With regard to Georgia’s unemployment trust fund and outstanding $721 million loan to the federal government, SB 447 would:
- Continue to suppress the increased tax rate that would be in place, cutting the surcharge in half. This would reflect a small increase in the optional surcharge of 35 percent now in place and make it mandatory until the federal loan is repaid and there is a $1 Billion balance in the Trust Fund.
- Raise the taxable wage base from $8,500 to $9,500 in 2013.
SB 447 was read for the first time by the Senate on February 16 and was assigned to the Senate Insurance and Labor Committee which is expected to hear the bill on Tuesday afternoon.