State Revenues for the first eight months of this fiscal year are running 4.7 percent ahead of the FY 2011 revenue collections. February revenues showed an increase of 7.0 percent over February of 2011. This follows the weak revenue numbers in January (growth of 0.7 percent) and December (decline of 1.2 percent).
On February 20 the Governor lowered the FY 2012 revenue estimate by $47.2 million, causing the projected revenue growth for FY 2012 to decrease from 4.5 percent to 4.25 percent. Moderate revenue growth throughout the remaining four months of the fiscal year will enable full funding of 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 Georgia State University Economic Forecasting Center’s February quarterly forecast projects FY 2012 revenue growth of only 4.5 percent.
Considering the downward revision of the FY 2012 revenue estimate, the FY 2013 revenue estimate is now projected at 5.2 percent growth over the FY 2012 revenue estimate. The Georgia State University Economic Forecasting Center’s February quarterly forecast projects FY 2013 revenue growth of only 4.0 percent.
The House and Senate are scheduled to go into session for the 31st legislative day on Monday, March 12 , the 32rd day on March 13 and the 33rd day on March 14. The General Assembly is scheduled to go back into session on for the 34th legislative day on March 19 and stay in session through March 22 (37th legislative day).
Amended FY 2012
The House passed the Amended FY 2012 budget (HB 741) on Friday, Feb. 3 by a vote of 159-0.
The Senate passed HB 741 on Thursday Feb. 23 by a vote of 51-1.
The Senate incorporated the Governor’s $47.2 million lowering of the revenue estimate through eliminating the increased funding of the Care Management Organization payments within the Low-Income Medicaid Program and the PeachCare Program (savings of $82.2 million).
There are only relatively minor differences between the House and Senate budgets. The Senate Budget:
- Adds $34.4 million to meet projected expenses in the Low-Income Medicaid Program, resulting in a $19.3 million increase from the Governor’s budget proposal.
- Eliminates funding for revised co-payment proposal in the Low-Income and PeachCare Programs that would have implemented smaller co-pays ($2 million).
- Adds $1.2 million in the Public Health budget for the Children 1st Program, to replace lost TANF funds.
- Adds $3.8 million for virtual State Special Charter Schools.
A Conference Committee on HB 741 has yet to be officially named.
FY 2013 Budget
The House passed the FY 2013 budget (HB 742) on Wednesday March 7 by a vote of 151-21.
Overall, the House FY 2013 budget contains relatively minor adjustments to the governor’s budget proposal. Many of the adjustments restore some of the additional cuts contained in the Governor’s budget proposal and replace some of the federal TANF funding cuts with state funds. For additional information, download GBPI’s FY 2013 Budget Analysis: House Budget.
Highlights from the House budget:
- Rejects transfer of funds for School Nurse and Nutrition programs into the QBE program as recommended by governor, and reducing governor’s proposed cut to School Nutrition program by $283,176.
- Reduces $12.8 million in state funds savings by assuming that FY 2012 surplus funds will be available to DCH in FY 2013.
- Adds $8.5 million in new funding (bringing the total FY 2013 increase to $30 million) to update nursing home reimbursement rates to the 2010 cost report.
- Adds $810,000 to fund 50 new waiver slots for the Independent Care Waiver Program.
- Adds $4.7 million to the Department of Public Health budget in FY 2013; $2.2 million to the Children 1st program to replace lost federal funds, and $2.5 million to implement the first and second year of a 7-year phase-in of the revised distribution formula for public health grants to counties.
- Adds $800,000 in General Funds to the Adult Addictive Diseases program to restore lost federal TANF Funds. The budget also transfers $2.5 million in other federal funds to this program to further make up for the lost federal TANF funds.
- Transfers the Division of Rehabilitation Services from the Department of Labor (DOL) to a newly created agency, Georgia Vocational Rehabilitation Agency, which would be attached to the DHS, effective July 1, 2012. The agency would be assigned to DHS for administrative purposes only.
- Provides additional $2.4 million to initiate a law enforcement career ladder within Forensic Scientific Services and Regional Investigative Services and provides $1.1 million to initiate law enforcement career ladders in the Wildlife Resources division and Parks, Recreation and Historic Sites.
The Senate continues to hold hearings on the FY 2013 budget.
Dowload FY 2013 Budget Analyses of Governor’s Budget Proposal:
View the new report Adding Up the Fiscal Notes – Crossover 2012 for a full rundown of tax bills that have passed either the House or Senate this year. Also see below for tax and fiscal items of particular note:
HB 868 was approved by the House in drastically-altered form and is now in the Senate Economic Development Committee. Originally costing up to $75 million per year, the final version of HB 868 contained only a series of technical changes that are unlikely to significantly alter revenues.
HB 920 , a vital piece of reform designed to maximize the effectiveness of tax-side spending, was held in the House Rules Committee. Options still exist for bringing it into law this year, which policymakers should closely consider in the coming days. Read more: http://romenews-tribune.com/view/full_story/17802641/article-Some-spotlight-bills-died-on-Crossover-Day-in-Georgia?instance=home_news_lead
HB 993 failed to emerge from committee before Crossover. It would have reinstated Georgia’s sales tax holiday for two years while also creating a new “Amazon law” for taxing internet sales.
HB 1027 is in Senate Finance after passing the House on Crossover Day. The bill closes some loopholes in Georgia’s film tax credits and makes some small changes in eligibility that will bring in an estimated $11 million in revenue over the next three fiscal years. Read more: http://blogs.ajc.com/radio-tv-talk/2012/03/08/new-bill-tweaks-filmtv-tax-incentives/
HB 318 and HB 338 passed the House and are in the Senate Finance Committee. They revive two small sales tax exemptions designed to aid in hunger relief. HB 318 exempts food that restaurants or grocery stores donate to qualified nonprofits, while HB 338 exempts food that is purchased by Georgia food banks. The bills cost approximately $1 million per year combined.
HB 743 is in the Senate Finance Committee after passing the House. It extends the exemption from motor fuel taxes currently enjoyed by public transit and campus vehicles, which has been in existence since 1978. Extending the exemption will cost around $3 million per year.
HB 811 is in Senate Appropriations after passing the House. The bill would restrict legislators’ ability to divert the revenue collected from fees intended to fund a specific purpose (e.g. tire removal, police training). It would require legislators to instead appropriate the revenue from fees as intended, with some exceptions, rather than redirecting it to the General Fund.
HB 48 was passed by the Senate Finance Committee 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 was vetoed in 2010 by Governor Perdue.
SB 402 was approved by the House Retirement Committee after previously passing the Senate. It would reform Georgia’s pension system to allow the state’s Employees Retirement Fund to invest in various “alternative investments,” such as venture capital. A maximum of 5 percent of pension assets could be invested in alternatives, and teacher pensions would be excluded from the reform altogether.
HB 718, which would have created a $200 million venture capital program called “Invest Georgia,” failed to clear the House after stalling in the House Insurance Committee.
With Crossover Day having passed, many observers expect the Governor will introduce an omnibus tax bill in the Special Joint Committee on Georgia Revenue Structure, which was specially-created for the current two-year session as a venue for working on “tax reform.” Comprised of members from both chambers, the Joint Committee is not held to the same 30-day rule as normal legislation. Although firm details do not exist, the expected omnibus package could include the sales tax exemption on energy for manufacturers; reforms to various other tax credits; and some revenue-enhancers meant to keep the bill revenue neutral.
HB 1166 requires health insurers operating in Georgia’s individual health insurance market to offer policies for child-only coverage. The bill also sets up rules for how these policies should be offered and notably establishes an “open enrollment” period of January 1 – 31, 2013 for families to sign up for coverage.
Currently, none of the health insurers offering coverage through the individual market offer child-only plans. This situation came about because of federal law changes that prevent insurance plans from excluding coverage of pre-existing conditions for children. In particular, the creation of an “open enrollment” period will allow for children in need to get coverage, while protecting insurance companies from “adverse selection” that occurs when people wait until they are sick to purchase coverage.
The bill has passed the House.
HR 1162 (LC 33 455s), proposes amendment to state constitution that clarifies state’s authority regarding K-12 education. The substitute version of original House Resolution 1162 (HR 1162 LC 33 4555S) proposes an amendment to Georgia’s state constitution. The amendment would explicitly state the General Assembly’s role in establishing state-wide education policies for public education. The amendment would also restate the state’s authority to establish special schools – which would include charter schools – in response to the ruling by Georgia’s Supreme Court in 2011 that the now-defunct Georgia Charter Schools Commission is unconstitutional. If HR 1162 passes both the House and Senate, the amendment would be presented to the citizens of Georgia, who would vote for or against the measure. House favorably passed bill upon reconsideration following prior failed House vote on February 8. On February 29, the bill was debated but tabled (not voted on) in the Senate.
HB 760, makes several changes to the K-12 education Capital Outlay Program. Currently, the program consists of four sub-programs: Exceptional Growth Program, Regular Program, Advanced Funding Program, and Low-Wealth Program. Notable changes within HB 760 include:
- Eliminate Exceptional Growth Program and transfer funding to the Regular Program. The maximum annual entitlement level for the Exceptional Growth Program is $100 million. These funds can only be used for new construction, or additions to existing facilities, and cannot be used to renovate or modernize existing facilities.
- Expand maximum entitlement level for Regular Program from $200 million to $300 million with the transfer of exceptional growth funds to Regular program. Regular growth funding provides greater flexibility – e.g. funds can be used for new construction as well as renovations – relative to the exceptional growth funding. Accordingly, HB 760 aims to allow school systems to benefits from a larger Regular Program.
- Allows state to provide funding to local systems in the event of destruction or damage to an educational facility caused by fire or natural disaster. Currently, local school systems must meet a local participation funding requirement in order to receive state capital outlay funding. HB 760 allows local systems to request state funding if they are unable to meet the required participation match. Any disaster-related advanced funding would be offset by capital outlay funds earned by the school system in the following year.
- Low-Wealth Program based on local property wealth and local sales tax revenues, per full-time equivalent, respectively. School systems ranked in the bottom 25 percent of local school systems for both metrics qualify for low-wealth funding. Furthermore, participating schools systems must levy a minimum equivalent of 12 mills. For each mill levied above the 12 mill minimum, local systems earn additional state funding for particular capital outlay projects under consideration. Accordingly, HB 760 aims to rewards local effort in regards to the Low-Wealth Program.
Senate Appropriations Committee favorably passed bill, which now moves to the Senate Rules Committee.
HB 797 is the enabling legislation for House Resolution 1162, which proposes amending the state constitution to allow for the creation of a state charter school commission. HB 797 articulates the authorities and responsibilities of the proposed state charter school commission – which would consist of seven appointment members – as well as the mechanism for funding authorized state charter schools.
The House favorably passed bill on March 7. The bill now heads to the Senate Education & Youth Committee for consideration.
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 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 Senate Health & Human Services Subcommittee for Health Care Delivery passed a substitute to SB292 (by a 2-1 vote) on Wednesday, Feb. 15. The Senate Health & Human Services Committee passed SB 292 on Monday, Feb. 27. The Senate passed SB 292 on March 7.
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.” The bill appears to charge TANF recipients who pass their drug test with the costs of administering The Lane Subcommittee Judiciary Civil passed HB 861 on February 21. The House Judiciary Committee passed an amended HB 861 that removed the law enforcement reporting language and added an effective date of July 1, 2013. HB 861, as amended, passed the House on March 7.
SB 312– requires food stamp applicants to “engage in professional development activities”, such as “working toward a general education development (GED) diploma, if not a high school graduate, pursuing technical education; attending self-development classes; and enrolling in an adult literacy class.” The substitute bill includes exemptions for those who are:
- Under age 16 or over age 59,
- Developmentally disabled,
- Caretakers with a child under age 6 or for an incapacitated adult,
- Working at least 30 hours a week,
- Participants in drug/alcohol rehabilitation program,
- Students who are at least part-time, or
- Unemployed insurance benefit recipients.
SB 312 would be piloted in five counties (to be decided by the Department of Human Services) and the bill’s effective date is contingent upon appropriations the DHS. No fiscal note has been made available on the substitute bill. The Senate Health & Human Services Committee passed SB 312 on Wednesday, Feb 29. The substitute bill passed on the Senate on March 7.
Proposed Transfer of Rehabilitation Services
HB 1146 proposes moving the Division of Rehabilitation Services from the Department of Labor to a newly created agency (Georgia Vocational Rehabilitation Agency) that would be attached to the Department of Human Services, effective July 1, 2012. The agency would be assigned to DHS for administrative purposes only. The bill also creates a Georgia Vocational Rehabilitation Services Board, appointed by the governor, consisting of nine members with vocational rehabilitation experience including five members who either have disabilities or have family members with disabilities. The executive director of the new agency would be nominated by the governor and approved by the Board. HB 1146 was approved by the House Human Relations and Aging Committee on February 23, 2012 and passed the House on Feb 28. The bill is now in the Senate Health and Human Services Committee.
Proposed Cuts to Unemployment Benefits
SB 447 makes drastic cuts to unemployment benefits and makes small changes to funding of theGeorgia unemployment trust fund.
For the unemployed, who lost their jobs through no fault of their own, SB 447 would:
- Impose a waiting week to delay payment of the first week unemployment compensation (which would eliminate a week of unemployment benefits for half of unemployment benefit recipients).
- Reduce the maximum number of weeks 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.
- Continue to suppress the increased tax rate that would be in place, keeping the surcharge at 50 percent until the $736 million 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 Feb. 16 and was passed by the Senate Insurance and Labor Committee on Feb. 21. The bill passed the Senate on Friday, Feb. 24 and is now in the House Human Industrial Relations Committee. For additional information download the SB 477 Fact Sheet.