2010 Legislative Session, Week 6

Hospital Bed Tax Turns Sour

On Wednesday morning, a glaring headline on the front page of the Atlanta Journal-Constitution declared that Governor Sonny Perdue's proposed 1.6% provider tax is going nowhere fast. House Appropriations Chairman Ben Harbin (R - Evans) and House Speaker David Ralston (R - Blue Ridge) have both stated that they don't see much support for the measure. Governor Perdue's proposed provider tax, along with a 1.6% tax on HMOs, is purported to close a huge gap in Georgia's Medicaid budget. Spokesmen for the hospital industry have said that the proposed tax would cost the industry up to $48 million a year, while representatives from the governor's office have stated that it would allow for an average Medicaid rate increase for hospitals of up to 14.5%. At the same time, the governor's office has repeatedly stressed that failure to pass the tax would result in a 16.5% rate cut for all providers.

Administration floor leader Rep. Jim Cole (R - Forsyth), a well-respected Republican from middle Georgia, presented the legislation to the House Appropriations Subcommittee on HB 307. Trey Childress, director of the Office of Management and Budget, and Ryan Teague , the Governor's Deputy Counsel, defended the legislation as the next rational step in healthcare funding. They also cited previously instituted provider fees on nursing homes and other medical functions. A long line of speakers formed to oppose the bill in the public comment section. A large number of those in opposition to the provider tax voiced strong support for a proposed tobacco tax, which Lt. Governor Casey Cagle has voiced opposition against. Those opposed to the legislation included the Georgia Alliance of Community Hospitals, HomeTown Health, the Georgia Hospital Association, the Georgia Dental Association, the Medical Association of Georgia and the Georgia Chamber of Commerce. At the conclusion of the meeting, the chairman of the subcommittee, Rep. Mickey Channell (R - Greensboro), told reporters that he had no idea when the committee would vote on the bill or if they would even take a vote on the bill.

Legislature Changes Schedule

On Wednesday evening, word began to spread that the legislature would adjourn for two weeks after Thursday, February 18.

With a $660 million deficit in state funds for Medicaid, the legislature is looking for additional time to decide where needed cuts will be made. Many lawmakers contend that they will need to cut over $1 billion to balance the budget because Governor Perdue's budget estimates a 4% growth rate for the year (many are skeptical that we will see that kind of turn around in the economy).

Speaker Ralston has ordered that only the House Appropriations, Transportation, Natural Resources & Environment, and the Ways & Means Committees meet during the two week adjournment.

The current schedule is as follows:

March 8, 2010 - legislative day 21
March 9, 2010 - legislative day 22
March 10, 2010 - legislative day 23
March 11, 2010 - legislative day 24
March 12-14, 2010 - in adjournment
March 15, 2010 - legislative day 25

Senate Passes Amended Budget

It took until the 30th legislative day in 2009, but this year, the General Assembly wasted no time in passing the state's FY 2010 Amended Budget on the 20th legislative day of 2010. The Senate voted 44-6 to pass the FY 2010 Amended Budget, complete with approximately $1 billion in cuts. The vast majority of cuts came from furloughing teachers and state employees for three additional days.

The Senate Appropriations Committee made some minor changes to the budget, so the amended budget is likely headed to a conference committee.

Cagle Applauds Senate On Passage of S.B. 374

SB 374 creates a legislative oversight committee to examine all state funds and programs dedicated to economic development purposes. There are currently five state entities that spend dollars on economic development: the Department of Community Affairs, the Department of Economic Development, the Department of Agriculture, the OneGeorgia Authority and the University System of Georgia. In the upcoming budget year, these agencies will combine for roughly $185 million in economic development projects. Lt. Governor Casey Cagle issued a release praising the Senate for their work on the legislation, citing the importance of using economic development resources wisely in the current economic downturn. The committee will be co-chaired by Lt. Governor Cagle, Speaker David Ralston, and the chairpersons of the House and Senate Appropriations, Economic Development, Higher Education, and Finance Ways and Means committees. The Minority Caucus will also have appointments to the committee.

Milton County, Anyone?

The state's most powerful female politician thinks it should become a reality and she said so to reporters this week. This year, Rep. Jan Jones (R - Milton) became a historical figure as she was elected the state's first female Speaker Pro-Tem. The quiet, studious community activist-turned-lawmaker has made it quite clear she intends to see the House, at the very least, vote on whether Georgians should be able to decide on whether to create Georgia's first new county in eight decades. HR 21 , if passed by two thirds of the General Assembly and 50%-plus-one of Georgia's voters in November, would create Milton County out of the prosperous suburbs of North Fulton County. Many Democrats under the Gold Dome are opposed to the measure, citing concerns that it would take away significant portions of Fulton County's tax base. Democrats' opposition is significant because, as a constitutional amendment, the measure would require 15 Democratic votes in the House and 4 Democratic votes in the Senate. If passed, the new county would include the new cities of Sandy Springs, Milton and Johns Creek as well as Alpharetta, Roswell and Mountain Park. House Speaker David Ralston has, to date, been relatively quiet on the issue. However, Georgia State University recently released a study on the issue, finding that the proposal was economically viable.

Vouchers Legislation Passes Committee

This week, SB 361, sponsored by Senate Majority Leader Chip Rogers (R-Woodstock), passed out of the Senate Education & Youth Committee. The legislation would re-name the Georgia Special Needs Scholarship to the Georgia Early HOPE Scholarship program, and would include providing vouchers to certain military and foster children (as well as to continue providing vouchers to students with disabilities). During the 2008-09 school year, $9.2 million in vouchers was distributed, with an average scholarship amount of $6,331.

Transportation...Moving Right Along

Senate Transportation Chairman Jeff Mullis (R-Chickamauga) introduced legislation to change the length of terms for GDOT Board members, SB 448 and SR 1126. Senator Mullis' legislation is nearly identical to Rep. Hamilton's, except in two ways. First, it specifically changes the length of GDOT Board members to "serve for the same term as members of the General Assembly." Legislators currently serve two year terms, but if that ever changed then GDOT Board members would also change. Second, Senator Mullis' legislation allows for a recall of a GDOT Board member by the legislative caucus that elects that member.

Last week, Governor Sonny Perdue held a press conference to announce his transportation plan, HB 1218 .The legislation would institute a one-cent sales tax for transportation statewide across the next 8 years. The vote would take place on project lists in each of the 12 different regional commissions in 2012. All of those projects, however, would have to be approved by the Director of Planning, a position appointed by the governor. The funds would be spent in the regions in which they are collected with no county opt-out. The legislation would send all new revenues to the State Road and Tollway Authority for management and disbursement. Finally, the legislation suspends the 50/50 restriction on MARTA's budget for three 3 years. The bill also calls for $300 million in bonds as previously announced by the governor's office.

On Tuesday, the House Transportation Committee also met and considered SB 305, legislation that would raise the cap on design-build contracts from GDOT from 15% to 30% of the previous year's budget. The legislation was amended to require reauthorization of the bill in 4 calendar years. The legislation will now proceed on to the House Rules Committee and then to the full House.

The Senate Transportation Committee met on Tuesday to consider SR 821, a constitutional amendment proposed by Senator David Shafer (R - Duluth) that would allow GDOT to change their accounting practices from a cash basis to a system of accrual or flow of funds. The change would allow GDOT to leverage more federal funds by issuing contracts on a multi-year basis. The committee addressed questions of whether allowing this type of accounting would be the equivalent of raising the state's debt level. Senator Shafer subsequently answered that the legislation would not create that situation. Senator Shafer also assured the committee that the internal policies adopted by GDOT and the mandates that come with receiving federal dollars would not allow for a situation in which dollars run out, leaving a bridge or other projects incomplete. The legislation was heard without opposition from any parties and passed out of committee unanimously.

The following day, the Sales Tax Subcommittee of the House Ways and Means Committee unanimously passed HB 1135, sponsored by House Transportation Chairman Jay Roberts (R - Camilla). Roberts' legislation seeks to establish the same change as SR 821, only through statutory means rather than by constitutional amendment.

Last week, Speaker Ralston announced plans for legislation that would shorten the terms for GDOT Board members.

This week, Rep. Mark Hamilton (R-Cumming) filed HB 1234, and an accompanying constitutional amendment in the form of HR 1446, that would shorten GDOT Board member terms to two years (members currently serve 5 year terms).

GDOT Board Elects New Board Members

On Wednesday, the General Assembly gathered to elect board members to the Georgia Department of Transportation's board seats for the 1st and 7th Congressional Districts. In the caucus for the 7th Congressional District, Rudy Bowen was unanimously re-elected to the Board. In the caucus for the 1st Congressional District, Rep. Jay Shaw (D - Lakeland) ran against former state Rep. Buddy DeLoach. Shaw defeated DeLoach on the first ballot. Rumors currently indicate that Shaw's son will run as a Republican to replace him in House District 176.

HOT Lanes Coming to Atlanta

On Tuesday morning, representatives from several other states joined Georgia Department of Transportation (GDOT) Commissioner Vance Smith, Jr., at the Georgia Freight Depot to provide information on bringing High Occupancy Toll (HOT) lanes to I-85 in Atlanta. HOT lanes have been used around the world as one of the most viable forms of pricing controls on traffic flow. Pricing strategies have been effectively adopted in London, Singapore and Stockholm. The first HOT lane in the United States didn't come online until 1996 in San Francisco, according to Regina McElroy , Director of the Office of Innovative Program Development of the Federal Highway Administration . HOT lanes help manage capacity, manage demand, raise revenue, attract private investment and increase traffic volume served, stated McElroy.

Tina Geiselbrecht , a research scientist with the Texas Transportation Institute, spoke on the success of HOT lanes in other areas around the country. In San Francisco, the percentage of low-income commuters who approved of the HOT lanes on I-15 was 80% as opposed to 70% of high-income commuters approving the measure. Within the first 12 months of opening HOT lanes on S.R. 167 in Seattle, 1,500 commuters purchased "quick passes." In 2008, Governor Sonny Perdue announced a $110 million federal grant to the State of Georgia for Phase I implementation of a long-term HOT lane strategy in metro Atlanta. This first phase will demonstrate the success of HOT lanes on approximately 15 miles of the I-85 corridor. The total cost of the project will be $182 million.

Report from GDOT Board Meeting

The GDOT Board held its regularly scheduled monthly meeting on Thursday, February 18. The current budget report indicates that 51% of FY 2010 motor fuel revenues have been spent, with approximately $336.6 million expected in future expenditures. Thirty one percent 31% of prior and current year federal authorizations have been spent, with expected future expenditures in the amount of $862 million. Of those expenditures, $153 million has been for personnel services, $890 million for capital outlay and $172 million for operations. One of the biggest challenges the Department is currently facing is the lack of reauthorization by Congress of The Transportation Act SAFETEA-LU, which expired on September 30, 2009. Since that time, the Federal Highway Program has been operating under the Continuing Appropriations Resolution of 2010.

Georgia has only received a small portion of highway revenues - approximately $361 million. This continuing appropriations resolution will be in effect until February 28. The danger is that the capital outly program must be downsized, and any contracts that have been signed without receiving federal funding by the end of the current fiscal year must be funded 100% by motor fuel revenue.

The Alternative Finance (P3) Committee of the GDOT Board re-opened the rule making process to incorporate three changes requested by the House and Senate Transportation Committees on January 21. The public comment period will end on March 22, and the revised final rules will be presented to the legislative transportation committees on March 23. The GDOT Board will offer final approval to the rules on April 15. The "West by Northwest" project (I-75/I-575 & I-285/I-20W) is projected to issue a draft request for proposal (RFP) on June 2, a final RFP on September 10, and accept final proposals on January 31, 2011. The contract is projected to be awarded on March 15, 2011.

As of the March letting, GDOT has currently let a total of 235 projects, not including 623 state aid projects. The vast majority of those projects have been rehabilitation and resurfacing. The projects have totaled $783 million in total lettings. Projects awarded from the regular program year-to-date total approximately $211 million. Of the 37 total projects let in February (13 local let), 24 were advertised, 2 withdrawn and 22 awarded. The March letting included 19 projects, only two of which were funded from ARRA. 12 of the March projects are rehabilitation and resurfacing, two (2) are traffic management, while the remaining 5 are various other projects. The total letting value is $58.3 million, with $2.55 million coming from ARRA funds. 18 of the projects are GDOT let, and the remaining project is a local let. All 19 of the March projects are located in economically distressed areas.

Today in History

February 19, 1807: Aaron Burr is arrested for treason and imprisoned at Fort Stoddert.

February 19, 1846: Texas' first state government is instituted in Austin as the Republic of Texas hands over power following the United States' annexation of Texas.

February 19, 1878: The phonograph is patented by Thomas Edison.

February 19, 1945: Thirty thousand (30,000) U.S. Marines land on Iwo Jima.

February 19, 1986: Russia launches its Mir spacecraft.

Have a great weekend!

SM

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