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GBPI Legislative Update: March 7, 2008
Georgia Budget and Policy Institute
GBPI LEGISLATIVE UPDATE
For Session 2008:
www.legis.state.ga.us/
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March 7, 2008
Overview of legislative action by the Georgia General Assembly on:
State Budget
Fiscal and Tax Policy
Healthcare Policy
House Sets Adjournment Calendar to Day 38:
Tuesday March 11th will be Day 30, or Crossover Day
The rest of the scheduled days are as follows: Mar. 12 is Day 31; Mar. 13 is
Day 32; Adjourned, Fri. Mar. 14 through Mon. Mar. 17; Mar. 18 is Day 33; Mar.
19 is Day 34; Mar. 20 is Day 35. Adjourned Fri. Mar. 21 through Mon. March 24
(easter Weekend),. Tue. Mar. 25 is Day 36; Mar. 26 is Day 37; and Mar. 27 is
Day 38. This schedule is subject to change by another resolution.
State Budget: FY 2008 Amended and FY 2009
The FY 2008 Amended Budget and the FY 2009 Budget are working their way through
the committee process. The FY 2008 Amended Budget was passed by the House on
February 8th and by the Senate on February 21st. A Conference Committee is
meeting.
Major differences between the House and Senate versions include:
The Senate eliminated the Governor's proposal to add funding for K-12
technology infrastructure upgrades ($40.8 million).
The Senate eliminated the Governor's proposal to add funding for new school
busses ($25.0 million).
The Senate eliminated the proposal by the House to pre-fund FY 09 shortfall in
Education Equalization Grants ($30.7 million).
The Senate added funds to the FY 2008 debt service in order to free up funds in
the FY 2009 budget to reduce the QBE austerity cut in FY 2009 ($78.7 million).
The FY 2009 budget will not be taken up by the full House Appropriations
Committee until there is a Conference Committee agreement on the FY 2008
Amended Budget.
For highlights of the Governor's budget proposals, click here.
Fiscal and Tax Policy
HR 900 (The "GREAT" Plan) and HR 1246 replaced with scaled down version, SR
796. The constitutional amendment and its companion legislation HB 979 would:
1. Eliminate motor vehicle tag taxes for cars registered to an
individual, reimburse local governments for the lost revenues, and implement a
$10 vehicle fee on all vehicles, which would go to trauma care.
2. Freeze property assessments at 2008 levels and allow them to increase
by no more than 2 percent (residential) and 3 percent (nonresidential) annually.
3. Create property tax revenue caps for cities, counties, and schools, so
that revenues could exceed previous year property revenue by no more than
government inflation.
SR 796 passed the Senate, but only included the assessment cap provisions at
that time. The House Rules Committee added in the car tax reduction and
revenue caps. Upon full implementation,SR 796 and HB 979 would have caused an
estimated $672 million decrease in state revenues,according to the official
fiscal note. The resolution failed to receive the two-thirds majority vote
needed on a constitutional amendment on Wednesday. For GBPI overview, click
here and for fact sheets, click here and here.
Assessment Caps - SR 686 and HR 3 would impose an assessment cap on property
values. SR 686, which passed the Senate, freezes assessed values on
residential property at 2008 levels and allows them to increase by no more than
inflation annually. HR 3 restricts assessed value growth to 9 percent for
every three-year period. Both resolutions are in the House Ways and Means
Committee. For GBPI analysis, click here.
.
Spending Limits and Restrictions - SR 20 and HR 956 would place a cap on state
revenues of population growth and government inflation. SR 20 passed the
Senate last year and is now in the House Ways and Means Committee, as is HR
956. SR 965 and HR 1216 require that surplus revenues are spent on only the
following three items and in this order: 1) education enrollment increases, 2)
Revenue Shortfall Reserve, and 3) increases in personal exemptions within the
state income tax. The resolutions also change the maximum RSR from 10 percent
of prior year spending to 8 percent and restrict the use of reserve funds for
one-time expenses, rather than on-going programs. SR 965 is in the Senate
Finance Committee, and HR 1216 is in the Tax Reform subcommittee of the House
Ways and Means Committee. For GBPI resources, click here.
Sales Tax for Transportation - SR 845 would authorize each county and cities
within the county to jointly levy an additional 1 cent local option sales tax
to fund the construction of transportation projects and mass transit networks.
The resolution would require the General Assembly to create by general law a
regional alternative, so that counties and cities on a regional basis could
levy the additional penny. Eighty percent of the new funds would remain in the
special district for transportation purposes, and 10 percent would remain in
the district for mass transit projects. The remaining 10 percent would flow to
DOT. The resolution was passed by the Senate and is now in the House
Transportation Committee. HR 1226 and its companion legislation HB 1139 would
authorize the General Assembly to levy an additional state-wide sales tax penny
for transportation projects. Ninety percent of the additional penny would
remain in the regional commission area (RDC boundaries) in which it was raised,
while the remaining 10 percent would flow to the DOT to be used in state-wide
projects. Both pieces of legislation passed the House Transportation Committee.
SB 300 and HB 1161 (Transparency in Government Act) enact several budget and
tax transparency measures. The original SB 300 included a tax expenditure
report, a much needed reform that GBPI analyzed here. The tax expenditure
report provisions were removed during the committee process, and the substitute
bill was passed by the Senate. SB 300 is now in the House Science and
Technology Committee. HB 1161 is in the House Appropriations Committee
SR 687 would authorize cities, counties, and school districts to levy an
additional sales tax of up to 1 cent. The resolution passed the Senate Finance
Committee. For GBPI analysis, click here.
SR 859 and HR 1120 would eliminate the state ad valorem tax, which will bring
in an estimated $89 million in FY 2009. SR 859 passed the Senate and is in the
Tax Reform Subcommittee of the House Ways and Means Committee. HR 1120 passed
the Ways and Means Committee this week.
HB 1157 and HB 878 would raise the amount of earned income Georgia taxpayers
age 62 and over can claim as part of their retirement income exclusion.
Currently, seniors can exclude $35,000 of retirement income from their state
income taxes, $4,000 of which can be earned income. HB 1157 would raise that
earned income amount from $4,000 to $16,000, while HB 878 would raise it to
$35,000. The Ways and Means Committee favorably reported HB 1157 this week,
and HB 878 received a hearing in the Committee.
HB 1197 would raise the excise tax on cigarettes by $1 per pack, for a new
price of $1.37. The bill is in the Tax Reform Subcommittee of the House Ways
and Means Committee. For GBPI analysis, click here.
HB 1264 (The "BETTER" Plan) includes comprehensive tax reform measures,
including a property tax circuit breaker and income and sales tax
modernization. The bill is in the House Ways and Means Committee.
Several pieces of tax legislation passed the House this week, including a
resolution establishing forest land conservation use, a bill to close a
corporate tax loophole, and a bill to revise the film tax credit. All tax
bills that have a fiscal note and have passed the House on the 30th day will be
featured in GBPI's annual "Adding Up the Fiscal Notes" in the coming weeks.
Healthcare Policy
HB 977 has been amended in the House Rules Committee to include provisions
previously included in HB 1087, SB 383, and HB 1210. The Rules Committee
Substitute exempts high deductible health plans from both the state portion
(2.25%) and the local portion (up to 2.5%) of the state insurance premium tax,
allows for income tax deductibility of monthly premiums paid for high
deductible health plans, and provides tax-credits to small employers who enroll
employees in high deductible health plans. The bill also changes GA insurance
code to fast track approval and encourage the marketing and promotion of
high-deductible health plans by the state Dept. of Insurance. The bill is
currently on the 30th day Calendar in the House. (GBPI recently released a
report examining high deductible health plans which can be found here.).
SB 383 (Insuring Georgia's Families Act) includes slightly modified versions of
the non-tax related provisions in HB 1087, most of which are now included in HB
977. The bill has passed the Senate and has passed the Health and Life
subcommittee of the House Insurance Committee.
HB 1229 creates an income tax credit ($25/hr) for individual physicians who
provide uncompensated medical care at free clinics in Georgia. The bill is
currently in the House Ways and Means Committee
SB 304 would require DHR to gather data on the employers of persons who enroll
in public health coverage or who receive uncompensated care at a hospital, and
would require the agency to report to the Legislature every year on those
employers with more than 25 employees on the list. The bill was heard in the
Senate Insurance & Labor Committee 2/6 and assigned to subcommittee.
SB 380 requires all insurers in Georgia operating in the group market to also
operate in the individual market and to offer a high deductible health plan in
both markets. The bill also grants the Dept. of Insurance new authority
regarding rate and benefit review and allows insurers to grant premium
reductions as rewards and incentives for certain healthy behaviors. The bill
is currently assigned to the Senate Insurance and Labor Committee.
SB 395 creates the safety net clinic grant program in the Department of
Community Health. The bill passed the Senate and has been assigned to the
House Appropriations Committee.
SB 404 (Georgia Health Marketplace Act) would create the Georgia Health
Marketplace as a web-based portal allowing for sale of certain traditional
health insurance products (including PeachCare for Kids) as well as
non-insurance products (such as pre-paid services contracts with individual, or
groups of, providers). The bill passed the full Senate on 3/6.
The Georgia Budget and Policy Institute is the state's leading independent,
nonprofit, non-partisan organization engaged in research and education on the
fiscal and economic health of the state of Georgia. The Institute provides
reliable and timely analyses of Georgia's budget and tax policies and promotes
greater state government fiscal accountability, improved services and an
enhanced quality of life for all Georgians.
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