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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