WEEKLY LEGISLATIVE REPORT
Representative Barbara Massey Reece
Week of April 19, 2010
A majority of the House of Representatives voted last week to approve a $17.8 billion state budget for fiscal year 2011. I have deep concerns about the spending plan because it is a continuation of the misplaced priorities and fiscal irresponsibility that have plagued Georgia for the last eight years.
Public education should always be the state’s top budget priority, but HB 948 proposes to reduce another $527 million in Quality Basic Education formula funding to local school systems. This brings the total reduction in public school funding under the Perdue administration to more than $2.1 billion, hurting our children and shifting the tax burden from the state level to local property owners. HB 948 now goes to the Senate for its consideration.
Fee Increases, Tax Cuts
Before the budget vote, House leaders maneuvered to pass a bill with two tax increases totally more than $250 million while in the same bill, including two tax cuts. HB 1055 was originally a proposal to increase registration, licensing and user fees on more than 80 services bringing in approximately $96 million. The increased costs to citizens affect a broad range of fees, including civil court filings, business registrations, specialty car tags and numerous annual license fees charged by the Department of Agriculture.
As passed, HB 1055 also includes a 1.45 percent provider fee on hospitals, which will generate approximately $169 million. This fee was actually approved earlier in the session, but differences between the House and Senate versions led to a compromise under which it would be rolled into HB 1055.
House leaders attempted to make the measure more politically acceptable for members who had signed a pledge not to increase taxes. Leaders added two tax cuts. One would phase out the state’s 0.25-mill property tax over time, an almost insignificant gesture considering how much of the tax burden the state has shifted to local property owners over the past eight years. This is the same leadership who eliminated the homestead tax relief credit which saved property owners $200-$300 per year. With the new property tax cut they will save $5 to $10 dollars.
The other tax cut would gradually eliminate the income tax on retirement income for Georgians 65 and older between now and 2016. Because retirement income of up to $35,000 for individuals and $70,000 for couples is already exempt, this action would actually help only the wealthiest retirees in the state.
There is an additional concern over whether the legislation is even legal because it combines tax code changes with fee increases. Sadly, those in power have chosen once again to balance the state budget on our underfunded public schools and overburdened property tax payers.
GEFA Loan Sell-Off
Also last week, a slim majority of House members voted to approve an amended version of HB 244, which includes the governor’s proposal to sell a portion of the Georgia Environmental Facilities Authority (GEFA) loans on Wall Street in order to raise some $290 million to help balance the budget. Because these loans are valued at $676 million, it makes no sense to sell off these assets at less than 50 cents on the dollar for a one-time budget fix. GEFA loans are made by the state to local governments at low interest rates to finance infrastructure projects across the state. Selling off this revolving revenue source will likely destroy the program, ruin Georgia’s AAA bond rating and force more expensive borrowing by local governments.
Other House Action
In other action last week, the House approved the following legislation:
- HB 194, which as amended would require a pharmacist who substitutes a generic drug for a brand-name prescription to include on the prescription label that the substitution has occurred.
- SB 355, which addresses the issue of who has the right to handle the disposition of the body of a deceased U.S. service member, utilizing a form that allows service members to designate an authorized person to handle their bodies in the event of their death.
- SB 374, which would create the Legislative Economic Development Council to evaluate the state’s overall economic development strategy, including tax breaks aimed at job creation, and report its findings to the governor and legislature.
- SB 397, which would create a “Blue Alert” system to assist in the apprehension of violent criminals who have killed or seriously injured a law enforcement officer.
April 29 Adjournment
The General Assembly was scheduled to reconvene on Tuesday, April 20, for the 37th legislative day of the 2010 session, which is now scheduled to adjourn on Thursday, April 29. This is reportedly the longest legislative session in Georgia since the 1880s.
Rep. Reece may be reached at 404-656-7859 or firstname.lastname@example.org. Rep. Reece serves on the Education Committee, State Institutions and Properties Committee, Science and Technology Committee, and the Legislative and Congressional Reapportionment Committee. She is also Secretary of the Rural Caucus.