GBPI LEGISLATIVE UPDATE
For Session 2008:
www.legis.state.ga.us/
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March 28, 2008
Overview of legislative action by the Georgia General Assembly on:
State Budget
Fiscal and Tax Policy
Healthcare Policy
State Revenue
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. Revenues must grow by 3.3 percent to meet the
Governor's revenue estimate.
House and Senate Calendar
Monday March 31st is Day 37; Tuesday April 1st is Day 38; Wednesday April 2nd
is Day 39; Adjourned Thursday April 3rd; Friday April 4th is Day 40. 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. The Conference Committee report passed the House and
Senate on March 20th. The Governor signed the bill March 21st.
The FY 2009 budget was passed by the House on March 20th and by the Senate on
March 28th. Due to a slowing economy, the Governor revised his FY 2009 revenue
estimate by $245 million. The FY 2009 Budget as passed by the House
appropriates $17 million more than the Governor's revenue estimate. The Senate
version equaled the Governor's revenue estimate.
Highlights of the differences between FY 2009 House and Senate budget
recommendations include:
? The House restored $90 million to the QBE funding formula leaving an
austerity cut of $51.5 million, while the Senate restored $56 million to the
QBE funding formula leaving an austerity cut of $85.5 million;
? The House provided $10.7 million in additional funds for QBE
equalization, while the Senate deleted these funds;
? The Senate increased HOPE Scholarships for Private Schools by $7.6
million (from $3,000 to $3,500);
? The Senate restored $18.9 million in cuts made by the House to the
Department of Corrections;
? The Senate added $17.2 million in TANF funds to be used for child care.
For the FY 2008 Amended Budget Bill, click here.
For the FY 2009 House and Senate Differences click here.
For highlights of the Governor's original budget proposals, click here
Fiscal and Tax Policy
Senate passes tax cut package, which will result in a $1.2 billion revenue loss
when fully implemented. The Senate substitute for HR 1246 and HB 1244 would
reduce income tax brackets by 10 percent over 5 years, eliminate the state
quarter-mill property tax, and implement assessment caps tied to government
inflation, with the ability of local governments to exceed the cap given a
local act of the General Assembly and voter approval. On Thursday, the Senate
Finance Committee removed the TABOR-like spending cap from the proposal. On
Friday, March 28th, the Senate passed both measures. These tax cuts were
approved in spite of the fact that Georgia is 49th in spending per capita. A
conference committee will be assigned to find a compromise between the House's
car tag tax elimination and the Senate's income tax cut. GBPI analysis of the
tax reform proposals prior to Thursday's changes can be found here:
? Policy Brief on Senate Proposal
? One-page Overview of Senate Proposal
? Revenue Growth Fact Sheet on Senate Proposal
? One-page Overview of House Proposal
? Fact Sheet Comparison to Virginia Experience for House Proposal.
Regional Sales Tax for Transportation Passes the House - As passed by the
Senate, 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. Ninety
percent of funds would stay in the district in which they were raised, with 10
percent of total funds going to mass transit in the district. The remaining 10
percent of funds would go to the state general fund to be spent solely on
transportation projects. The House passed a modified version on March 27th,
which would allow special transportation districts to levy the additional penny
rather than counties. These districts would have the same boundaries as the
regional commission areas (RDCs). All of the funds raised in a district would
remain in that district for transportation projects. In addition to the new
local 1 penny for transportation, an amendment approved by the House dedicates
sales tax funds currently going to the general fund to transportation
projects. Currently, one penny of the sales tax on motor fuels goes to the
state general fund, while the rest flows to the Dept. of Transportation for
highway projects. The amendment dedicated the $190 million raised from that
one penny to transportation projects rather than general appropriations
beginning in FY 2010. For a fact sheet on the resolution, click here. The
Senate disagreed with the House changes and a conference committee will be
assigned.
Several bills passed the Senate Finance Committee this week. A few of the
bigger ticket items are:
o HB 1133 - Income tax credit for individuals and corporations donating to
student scholarship organizations, which provide scholarships for students to
attend private schools. The aggregate amount of tax credits is capped at $50
million per year.
o HR 1276 and HB 1211 - Conservation use assessments for forest land.
Restricts the growth in property taxes for forest land and creates a mechanism
for the state to reimburse local governments for lost revenue. According to
committee testimony, the bill will cost the state $34 million for the
reimbursements and cost local governments $20 million given that the state
reimbursements will not cover the entire loss.
o HB 1158 - Along with new language on the Georgia Trauma Care Commission,
HB 1158 creates a $10 motor vehicle fee to trauma care. While the $83 million
raised by the fee will not be dedicated, it is the intent of the legislature
for those funds to go to the trauma care network.
For a list of tax bills that can be considered by the Senate in the last days
of Session, see GBPI's "Adding Up the Fiscal Notes," which totals the cost of
tax bills that passed the House by the end of the 30th legislative day.
House Ways and Means Committee passes substitute for SR 20. As passed by Ways
and Means, SR 20 no longer contains a TABOR-like spending cap. The substitute
language restricts the spending of surplus funds to education enrollment
increases, reserves, debt service, and taxpayer refunds. The resolution also
makes the reserves "full" at 8%, rather than the current 10% of prior year
spending.
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 passed the Senate Finance Committee 3/26. (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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