Georgia Budget and Policy Institute
GBPI LEGISLATIVE UPDATE
For Session 2008:
www.legis.state.ga.us/
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February 29, 2008
Overview of legislative action by the Georgia General Assembly on:
State Budget
Fiscal and Tax Policy
Healthcare Policy
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.
Commentary: Have responsible, not reckless, tax reform
"Fiscally responsible tax reform would help, not hurt, the areas so key to the
capital investment and economic development critical to a prosperous and
healthy Georgia." The full text of a guest commentary by GBPI Executive
Director Alan Essig was published in the Thursday, February 21st 2008 edition
of The Atlanta Journal-Constitution. To read the commentary, click here.
Fiscal and Tax Policy
HR 900 (The "GREAT" Plan) replaced with HR 1246. The constitutional amendment
and its companion legislation HB 979 would:
1. Eliminate education property taxes for homeowners and reimburse school
districts in a similar manner to the current Homeowner Tax Relief Grants. If
revenues are sufficient, the General Assembly could extend similar relief to
other property owners.
2. Repeal the state ad valorem tax.
3. Create a refundable low-income tax credit for qualified food expenses.
4. Eliminate motor vehicle tag taxes for cars registered to an individual,
reimburse local governments for the lost revenues, and implement a $20 vehicle
fee on all vehicles, half of which would go to trauma care.
5. Expand the state sales tax base to include personal services, lottery
tickets, and groceries.
Upon full implementation, HR 1246 and HB 979 would cause an estimated $826
million decrease in state revenues, according to the official fiscal note. The
resolution and companion bill passed the House Ways and Means Committee. For
GBPI analysis, click here and for a Reality Check fact sheet, click here.
Assessment Caps - SR 686, SR 796, 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. SR 796 would freeze assessed values at 2008 levels and
allow them to increase by no more than 2 percent (residential) and 3 percent
(nonresidential) annually. The House Committee Substitute for SR 796 included
revenue caps for ad valorem taxes, so that local property tax revenues could
exceed prior year revenues by no more than government inflation. SR 796 passed
the Senate and the House Ways and Means Committee. An updated GBPI analysis
can be found here. HR 3 restricts assessed value growth to 9 percent for every
three-year period. HR 3 is in the House Ways and Means Committee.
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, where it received its first hearing this week. 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 would eliminate the state ad valorem tax, which will bring in an
estimated $89 million in FY 2009. The resolution passed the Senate and is in
the Tax Reform Subcommittee of the House Ways and Means Committee, where it
received its first hearing this week.
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 and received its first hearing this week. GBPI will
release analysis of this topic on Monday.
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 other bills have passed the House Ways and Means Committee, including a
sales tax exemption for energy used in manufacturing, the annual sales tax
holiday, and a conservation use act for timber land. 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 exempts high deductible health plans from the state portion of the 2.25%
state insurance premium tax and allows for income tax deductibility of monthly
premiums paid for high deductible health plans. The bill passed the House Ways
and Means Committee 2/28.
HB 1210 allows for the income tax deductibility of premiums paid for high
deductible health plans and creates a $250 tax credit to small businesses for
each employee they enroll in high deductible health plans. The bill is
currently in the Income Tax Subcommittee of the House Ways and Means Committee,
where it received its first hearing this week.
HB 1087 (Insuring Georgia's Families Act) would eliminate the insurance
premiums tax for high deductible health plans, allow for income tax
deductibility of premiums paid for such plans, and grant tax-breaks to small
businesses whose employees enroll in such plans. Also it would change GA
insurance code to encourage the proliferation of high-deductible health plans.
Currently assigned to House Committee on Insurance. (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. The bill has passed the Senate and
has been assigned to 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
scheduled to be heard in the House Special Committee on Grady 3/4.
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 Senate Committee on Health and
Human Services 2/21 .
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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