2010 Legislative Session, Week 7

Legislature Holds Hearings on the Budget

Joint hearings were held this week by subcommittees from the the House and Senate Appropriations Committees regarding the FY 2011 Budget. Department heads and the members of the public gave presentations to each subcommittee.

Advocates for public safety warned of the dangers of cutting law enforcement budgets; healthcare advocates begged not to see further cuts to Medicaid; and a representative from the Department of Education told lawmakers they may have to consider cutting instructional time and days if they want to make a significant impact on trimming the budget.

In nearly every hearing, lawmakers asked each department for the number of employees that are close to retirement, hinting at potential early retirement offers as a way to cut the number of state employees (this would be in addition to the layoffs of state employees). Rep. Austin Scott (R - Ashburn), a gubernatorial candidate, was quoted by Atlanta Journal-Constitution reporter Jim Galloway as saying that the House and Senate Appropriations Committees are weighing the elimination of entire sections and divisions of agencies.

Lt. Governor Casey Cagle Calls on Legislature to Pass Angel Tax Credit

Lt. Governor Casey Cagle (R - Gainesville) has made economic development and job growth in Georgia a top priority this legislative session in an effort to stimulate the state's stagnant economy. This week, he published a guest column in the Savannah Morning News calling on the General Assembly to pass the "Angel Investor Tax Credit" contained in HB 1001, sponsored by Rep. Chuck Martin (R - Alphapretta). "Angel" investors write personal checks to stimulate growth in small businesses, and HB 1001 would provide a tax credit for half their investment, capped at $50,000. North Carolina instituted a similar tax credit that created 700 new jobs with an average salary of $58,000; and Cagle has previously stated that this tax credit, and its possibility to stimulate job growth, is something that Georgia cannot afford to ignore.

Rasmussen Shows Changes in Gubernatorial Race

On February 18, Rasmussen conducted a new 500-voter poll for Georgia's gubernatorial race. In a surprise, the poll showed three of the top four Republican candidates polling ahead of the likely Democratic candidate, former Governor Roy Barnes (those three Republicans are Insurance Commissioner John Oxendine, former Secretary of State Karen Handel, and Congressman Nathan Deal). All three Republicans are earning 43%-45% of the vote against Barnes, who is getting between 36%-37% of the vote. Barnes and former Senate President Pro Tempore Eric Johnson, the fourth top Republican candidate, are tied at 37%.

Barnes has the highest "very favorable" rating, 26%, among the 5 candidates mentioned.

However, he also has the highest "very unfavorable" rating with 22%.

The following are the "very favorable" and the "very unfavorable" ratings for the four Republican candidates in the poll:

• Oxendine, 12% very favorable; 11% very unfavorable
• Deal: 8% very favorable; 8% very unfavorable
• Handel: 13% very favorable; 7% very unfavorable
• Johnson: 6% very favorable; 5% very unfavorable

Porter Times Two? Dublin's Carol Porter Announces for Lt. Governor

Carol Porter, the wife of House Minority Leader DuBose Porter (D - Dublin), has declared her intention to oppose Lt. Governor Casey Cagle in November's election. Carol Porter will join her husband on the campaign trail as he pursues the Democratic nomination in Georgia's gubernatorial race. Porter made it clear, however, that while she and her husband would run as a team, she would form her own campaign, raise her own money, and run on her own issues. Shannon Fickling, a Macon architect, will be Porter's finance director and Joan Martin, wife of former U.S. Senate Candidate Jim Martin , will serve as Porter's campaign chair.

Karen Handel Announces Plan to Cut Budget

Former Secretary of State Karen Handel, a Republican gubernatorial candidate, announced her plan to deal with the current state budget crisis. Handel's plan includes eliminating 10% of the state's employees, while exempting public safety officers and teachers from the reduction. Doing so would reduce the state's workforce by 7,800 employees, saving $404 million. In addition, Handel would keep the current budget savings that have been accomplished through attrition, resignations and retirements (this would amount to savings of $190 million).

Transportation

This week, Governor Sonny Perdue's solution to Georgia's statewide transportation problem,HB 1218, debuted in a House Transportation subcommittee hearing. The legislation was presented by Jim Cole (R - Forsyth), Governor Perdue's chief floor leader in the House. The Governor's office says that the legislation would raise an additional $700 million per year in transportation funding. Those dollars would come in addition to regular program dollars coming from proceeds of the motor fuel tax.

The legislation divides the state into 12 separate taxing regions called Regional Commissions. Among those 12 taxing regions is the 10-county Atlanta area MPO. Voters within each region would have the opportunity to vote, in 2012, to accept a one-penny sales tax for transportation purposes.

Several committee members expressed concern about the bill sending all of the new transportation funds to the State Road and Tollway Authority, circumventing the traditional structures of the Georgia Department of Transportation. The legislation also eliminates the Congressional balancing system, in favor of balancing the funds on a formula based around the regional commissions. Cole and Jannine Miller, the Governor's transportation policy advisor, continually stressed that HB 1218 is a work in progress, and that the legislative process will vet the legislation into a better bill.

Many industry insiders expect the legislation to change drastically as it moves through the legislative process, particularly in the House. Members of the Senate have historically opposed any language that would prevent counties from opting out of such a sales tax, and many expect there to be little change in that stance. Perdue's initial legislative draft would allow for no such opt out.

Representative Ed Lindsey's Take on the Budget

We received an email newsletter from House Majority Whip Ed Lindsey (R-Atlanta) this week containing an excellent summary of the budgets with which the General Assembly is currently grappling. We've copied that from his newsletter for your reading pleasure:

Our Amended Fiscal Year 2010 Budget (HB 947) is $17.4 billion; this is almost twenty percent less than the 2009 budget of $21.2 billion. The 2010 budget will be close to 2005 spending levels and, if adjusted for both population and inflation, will be near mid-1990’s levels.

Revenue collections for Fiscal Year 2010 are down 12.9% ($1.286 billion) for the year to date. The Governor has ordered agencies to curb spending, and set aside funds totaling over $900 million in response to the decline in revenues.

Some of the Governors recommendations to achieve budget savings include:

• Furlough Days (6 for teachers and state employees)-$261 million
• Recapture funds for other post employment benefits-$140 million
• Savings from State Health Benefit Plan-$65 million
• Executive Branch agency reductions (Most at 8%)-$338 million
• K-12 reductions (some protection at 4%)-$281 million
• Medicaid Reductions-$65 million
• Legislative (at 8%) and Judicial Reductions-over $10 million
• Debt savings due to favorable rates and AAA rating-$88 million

The House worked with the Governor’s revenue estimate and adopted many of his proposals for both reductions and additions. The House also improved the Governor’s budget by establishing our own goals. Some of the House’s goals include:

• Defraying the reductions to K-12 programs that have a direct impact on classrooms and students
• Restore integrity of lottery-funded HOPE scholarships
• Support and enhance Healthcare delivery systems
• Continue to downsize government while continuing to provide vital services to Georgia’s citizens
• Invest in improvement needed to collect tax revenue legitimately owed to the state

While the budget cuts have been difficult, the silver lining is that HB 947 does not borrow from the future, draw on remaining reserves, or include any gimmicky accounting schemes.

FY2011 Budget

As the Appropriation Committee grapples with the Fiscal Year 2011 budget, the following are the answers to common questions for you to consider:

What is the total state 2011 Budget?

The Governor’s entire proposed budget for FY2011 is just over $18 billion. Of this amount, the Georgia General Assembly has discretion over $16 billion in the General budget. The remaining $2 billion in consist of revenue from motor fuel taxes, all lottery funds and the Brain and Spinal Injury Trust Fund, are dedicated by state constitution to specific appropriation purposes.

What is the shortfall that will need to be addressed in the proposed 2011 Budget?

Projections put it at $1 billion or more. It about equals the Everything Else category listed below.

How is the Governor’s proposed 2011 General budget allocated?

• 56% $8.9 billion K-12 and Higher Ed 1.6 million K-12 students; 160,000 teachers; 30,000 Higher Ed students; 35 Colleges and Universities
• 14% $2.2 billion Community Health Medicaid, PeachCare, state health benefit plan, county public health departments
• 8% $1.2 billion Debt Sinking Fund Bond payments
• 6% $1 billion Corrections 54,000 inmates; 37 prisons
• 5% $800 million Behavioral Health Including 7 state-run mental health hospitals,
Mental Health, Developmental Disabilities
• 3% $500 million Human Services Including Child Welfare, TANF, Aging, Adoption, Foster Care Services
• 2% $320 million Technical Colleges 160,000 students; 65 colleges and branches
• 6% $1.1 billion Everything Else*
*Everything Else totals just over $1 billion in the budget. It covers 40 agencies and all branches of government, such as Public Safety; Juvenile Justice; Judicial System; Governor’s Office, Senate and House; Teachers Retirement; Driver Services; Pardon and Paroles; and Revenue Department.

This Day in History

February 26, 1815: Napolean Bonaparte escapes from Elba.

February 26, 1863: President Abraham Lincoln signs the National Currency Act into law.

February 26, 1870: New York hosts its first demonstration of the first pneumatic subway.

February 26, 1919: The United States Congress establishes the vast majority of the Grand
Canyon as a national park.

February 26, 1952: Sir Winston Churchill announces that Great Britain has an atomic bomb.

February 26, 1991: Sadaam Hussein announces the withdrawal of Iraqi troops from Kuwait, beginning the end of the Gulf War.

Have a great weekend!

SM

There are no simple solutions to working with the public or government. At Brock Clay, we integrate our services across lobbying, grassroots and public relations in order to create comprehensive solutions to complex problems. Whether we need to set up a town hall meeting, start a letter-writing campaign, work the halls of the Capitol or create a press release, we will find the right way to meet the challenge. As Harry Truman said, “It is amazing what you can accomplish if you do not care who gets the credit.”