Columbus, Georgia

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Georgia Budget and Policy Institute



















GBPI LEGISLATIVE UPDATE











For Session 2008:

www.legis.state.ga.us/





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March 14, 2008



Overview of legislative action by the Georgia General Assembly on:

State Budget

Fiscal and Tax Policy

Healthcare Policy









State Revenue Alert



State revenue figures released March 10th show a continued slowing of revenue

growth. February 2008 revenues were only 0.5 percent greater than February

2007 revenues. For the first eight months of FY 2008, year to date revenue

growth is only 1.9 percent. The Governor has decreased the FY 2008 revenue

estimate by $65 million. Even with the reduction in the FY 2008 revenue

estimate, revenues must grow by 2.9 percent to meet the Governor's new revenue

estimate.





House and Senate Set Calendar Through Day 35



March 12 is Day 31; Adjourned, Thursday March 13 through Monday March 17; March

18 is Day 32; March 19 is Day 33; March 20 is Day 34; Adjourned Friday Mar. 21

through Wednesday March 26 ; Thursday March 27 is Day 35. This schedule is

subject to change by another resolution.







State Budget: FY 2008 Amended and FY 2009



The FY 2008 Amended Budget was passed by the House on February 8th and by the

Senate on February 21st. A Conference Committee has been appointed. Due to

falling revenues the Governor has reduced the FY 2008 revenue estimate by $65

million. The Governor has recommended the following adjustments to his budget

recommendations:

Eliminate the Governor's proposal to add funding for K-12 technology

infrastructure upgrades ($40.8 million).

Eliminate the Governor's proposal to add funding for 557 new school busses

($25.0 million).

The Conference Committee is meeting to work out the differences between the

Senate and House versions and to take into consideration the lowering of the

revenue estimate.

The House and Senate Appropriation Sub-Committees are meeting in regards to the

FY 2009 Budget. Due to the economic slow down the Governor has reduced his FY

2009 revenue estimate by $245 million. Among other recommendations, the

Governor recommended reducing salary increases for state employees, teachers,

and faculty at the Board of Regents and Department of Technical and Adult

Education from 2.5% to 2%, reducing recommended slots for Independent Care

Waiver Program, eliminating funding for 1,000 additional slots for Mental

Retardation Waiver Program waiting list, reducing recommended increase in bed

capacity at County Correctional Institutions, reducing recommended increase in

funding for Day Reporting Centers, reducing recommended increases in various

education programs, and reducing recommended increase in public health funding.

It is expected that the House version of the FY 2009 budget will be voted on by

the 35th legislative day.



For highlights of the Governor's budget proposals, click here.







Fiscal and Tax Policy



House votes to eliminate car tag tax. By passing HR 1246 and HB 1158 on

Tuesday, the House voted to:

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. Eliminate the quarter-mill state property tax

Upon full implementation,HR 1246 would cause an estimated $772.8 million

decrease in state revenues,according to the official fiscal note. HB 1158

would provide an estimated $83.5 million for trauma care, contingent upon

approval of HR 1246 by voters in November. The resolution is now in the Senate

Finance Committee for consideration. For GBPI overview, click here and for

fact sheets, click here and here. As the Senate considers these bills, they

should weigh the potential revenue losses against the FY 2009 budget needs and

the strength of revenues as the state heads into a possible recession.

Senators should take this opportunity to balance the revenue losses associated

with this legislation; for example, the Senate could include a $1 cigarette tax

increase in HB 1158 to partially offset the negative effects of HR 1246. For

GBPI analysis of the health and revenue impacts of cigarette tax increases,

click here.



Tax bills passed by the House would result in up to $113 million in lost state

revenues in FY 2009. On Thursday, GBPI released its annual "Adding Up the

Fiscal Notes," which totals the cost of tax bills that passed the House by the

end of the 30th legislative day. Together, 17 bills and one resolution would

cost up to $113 million in FY 2009, $473 million in FY 2010, and $798 million

in FY 2011, largely due to the full implementation of the car tag tax

elimination in that fiscal year. These fiscal impacts do not include several

bills that extended sunset dates for existing sales tax exemptions. To

download the report, click here. As the General Assembly passes more

exemptions and tax credits, it should also pass legislation requiring a tax

expenditure report, which would annually tally and evaluate the myriad

exemptions and credits already in law.



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. Since the House did not pass its transportation

sales tax, SR 845 will be the vehicle for a House and Senate compromise. The

House's version called for 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.





Healthcare Policy



HB 977 was 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 (1 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 passed

the House on 3/11 and is assigned to the Senate Finance Committee. (GBPI

recently released a report examining high deductible health plans which can be

found here as well as an overview of HB 977 and fiscal impact of the above tax

provisions, which can be found here.)



HB 1234 (Medicaid Care Management Organization Act) establishes and/or codifies

rules and requirements for care management organizations (CMOs) that contract

with DCH to serve Medicaid and PeachCare beneficiaries. Among other changes

the bill does the following:

Prohibits CMOs from requiring prior authorization for emergency services, sets

requirements for CMO reimbursement of emergency services provided by

noncontracted providers and requires CMOs to pay for emergency services based

on the "prudent layperson" standard;

Requires CMOs to contract with all critical access hospitals in their service

region and for CMOs to reimburse these hospitals for "all allowable costs";

Establishes payment procedures to assure that the CMO covering a pregnant woman

also pays for the newborn until the baby's discharge or that DCH pays for

infants born to Medicaid mothers in fee-for-service;

Allows providers to consolidate appeals and complaints rather than pursuing

them separately and requires CMOs to pay 18% interest on denied claims that are

later paid;

Requires CMOs to maintain an up-to-date, searchable, internet-based list of

in-network providers;

Requires DCH to pay for services provided if a provider verifies a patient's

eligibility even if the patient is later found to be ineligible or not actually

enrolled; and

Grants the Department of Insurance the authority to revoke or suspend a CMO's

certificate of authority or to impose a monetary penalty on a CMO for violation

of new or existing laws.

The bill passed the House on 3/11 and is assigned to the Senate Committee of

Government Oversight.



HB 1299 establishes that a Hospital authority created by 2 counties (in

particular, this bill applies to Grady Health System) shall be managed by a

non-profit hospital management corporation and that the non-profit corporation

shall be governed by a 17-member board. The board would be made up by 4

appointees each from the Governor, the Lt. Governor, and the Speaker of the

House; 3 appointees from the larger of the 2 counties; and 2 appointees by the

smaller of the 2 counties. This bill passed the House on 3/11 and is assigned

to the Senate Committee of Government Oversight.



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 and is scheduled

for a initial hearing in the Health and Life Subcommittee of the House

Insurance Committee 3/18.









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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