ATLANTA – The
General Assembly does not need to pass another tax cut to grow Georgia’s
economy, State Economist Jeffrey Dorfman said Tuesday.
Georgia
lawmakers reduced the state’s income tax two years ago from 6% to 5.75%, the first
change in the rate since the 1930s. The 2018 bill called for the legislature to
vote again this year whether to reduce the tax rate again to 5.5%.
But with employment
in Georgia and the state’s unemployment rate already at record highs, cutting
taxes again would not be an effective way to increase economic activity by
luring other businesses to the Peach State, Dorfman told members of the state
House and Senate Appropriations committees at the start of three days of budget
hearings.
“A quarter
percent one way or the other just doesn’t move the bar,” Dorfman said.
The $28.1
billion fiscal 2021 state budget plan Gov. Brian Kemp unveiled last week does
not take into account the $500 million revenue hit the state would absorb if
the General Assembly follows through with the additional .25% tax cut.
In an
interview just before the start of this year’s legislative session, Kemp noted
the tax cut was an initiative then-Gov. Nathan Deal steered through the General
Assembly before Kemp took office and there might not be “an appetite” among
lawmakers to approve the additional cut.
Legislative
Democrats and some Republicans have argued now is not the right time to cut taxes
further, as lawmakers take up a proposed budget full of spending reductions
Kemp has recommended to account for a slowdown in tax collections since the
middle of last year.
But other
members of the legislature’s Republican majority, including House Speaker David
Ralston, R-Blue Ridge, have endorsed following through with the second
installment of the tax cut to fulfill a promise GOP candidates made on the
campaign trail.
On Tuesday,
Dorfman said the first tax cut two years ago already has achieved what Deal set
out to do in 2018 by wiping out any revenue windfall the state expected to
receive from congressional passage of tax reform legislation in late 2017.
“We did a
good job giving the windfall back to taxpayers,” he said. “We don’t need that
additional quarter-point cut to take care of that.”
Dorfman, who
warned lawmakers last September there might be a mild recession in Georgia
early this year, gave a more optimistic economic forecast on Tuesday. He said all
economic indicators show the state should avoid a recession barring an
international crisis such as a renewal of the trade war between the U.S. and
China or a disruption in the oil markets of the Middle East.
With tax
revenue growth slowing dramatically in Georgia, Kemp ordered most state
agencies last summer to reduce spending by 4% during the rest of this fiscal
year and 6% in fiscal 2021, which starts July 1.
Speaking
before Dorfman on Tuesday, the governor praised department heads for coming up
with innovative ways to meet his budget-cutting targets, including
consolidating space to reduce rental costs and merging programs now handled by
two agencies under one agency’s umbrella to eliminate duplication.
He cited the
Georgia Department of Corrections for saving $16 million in overtime costs through
more efficient scheduling.
“We’ve shown
taxpayers we are good stewards of their hard-earned money,” Kemp said.
The budget
review hearings will continue through Thursday, with the full General Assembly
returning to the Gold Dome next week.
ATLANTA – Georgians with terminal illnesses would have the option of taking medication to end their lives under a state Senate bill introduced this week.
Under Senate Bill 291, dubbed the “Georgia Death with Dignity Act,” patients given a prognosis of six months or less to live would qualify to request aid-in-dying medication that they may take themselves. Several requests and assessments from at least two physicians would be required before the person could receive the medication, which supporters say would reduce the risk for abuse.
If passed, doctors or loved ones who help the terminally ill end their lives would no longer be subject to criminal prosecution. Currently, the practice is a felony under the state’s assisted-suicide law that can result in a prison sentence.
Sen. Steve Henson.
Senate Minority Leader Steve Henson, the bill’s sponsor, said he sees the option as a “humane and sensible way” to ease a dying person’s pain. He came around to the idea after hearing from a constituent last year who had terminal pancreatic cancer and wanted access to aid-in-dying medication.
“For people suffering, it would ease their pain and make that transition easier,” said Henson, D-Stone Mountain. “I think it’s common sense.”
Henson noted the bill includes measures
to prevent relatives or others with financial interests from pressuring
terminally ill persons to kill themselves. A person’s attending physician would
need to consult a second doctor to determine that person’s mental capacity. A
written request for the drugs would also need two signatures, one of which
could not be a relative, spouse, heir to an inheritance or someone with
power-of-attorney.
The bill is poised for pushback from
religious groups. The Georgia Baptist Missionary Board passed a resolution in
2017 opposing life-ending medication. The conservative Faith and Freedom
Coalition also rejects it.
“We have all heard real life stories of people who have outlived their diagnosis, and we believe that every life should be given every opportunity to live,” said Adam Pipkin, the coalition’s executive director.
The Roman Catholic Archdiocese of Atlanta also opposes the bill, arguing in a statement Friday that it targets the elderly and disabled persons.
“We will urge the Georgia General Assembly to do all it can to protect Georgians from this cruel practice and to ensure those who are ill, disabled or facing the end of life receive comprehensive medical and palliative care instead of facilitated suicide,” the Archdiocese’s statement says.
A handful of other states have enacted end-of-life laws including California, Oregon and New Jersey. Legislative pushes to change assisted-suicide laws stemmed from the case of Brittany Maynard, a 29-year-old with terminal brain cancer who moved from her home state in 2014 to a different state that allowed aid-in-dying drugs.
Georgia’s rural hospital tax credit program failed to reach its contributions cap last year.
ATLANTA – Two
popular state tax-credit programs that raise money for rural hospitals and
private-school scholarships are having more trouble attracting donors than when
they were first launched, a problem supporters blame on federal tax laws.
The 12-year-old
private-school scholarships tax credit was consistently hitting its $58 million
cap on contributions so early in the year the General Assembly raised the limit
to $100 million in 2018. But last year, the program didn’t reach the new cap
until Dec. 2.
The rural
hospital tax credit didn’t even hit its $60 million cap last year for the first
time since lawmakers created the program in 2016.
It came
close, reaching $49.4 million by the end of 2019, according to figures supplied
by the Georgia Department of Revenue. But the program is off to a slow start
this year, with $6.7 million in donations as of Jan. 14.
In the
aftermath of tax reform legislation President Donald Trump steered through
Congress near the end of 2017, the Internal Revenue Service declared in 2018
that individual taxpayers could no longer receive an income tax deduction for
charitable contributions if they received a state tax credit for the same
donation.
The change has
discouraged would-be contributors from applying for the tax credit, said Jimmy
Lewis, CEO of HomeTown Health Care LLC, an advocacy group representing rural
hospitals in Georgia.
“The
donations dried up immediately because the return on investment for a donation
dried up instantly,” he said. “Donors are very sensitive to how they donate
their money, the return on investment.”
Lewis said
the tax credit program has been a godsend for cash-strapped rural hospitals,
allowing them to spruce up emergency rooms and operating rooms and, in some
cases, add new health-care service units to their facilities.
“This is the
simplest way to get capital into a hospital without having to go into onerous
costs and administrative burdens,” he said. “It’s a great program.”
Rural
Georgia suffered through a series of hospital closures around a decade ago.
Since then, however, only a couple have downsized their operations while
remaining open for business.
While
supporters of the tax credit program attribute some of that positive trend to
the donations, a separate initiative then-Gov. Nathan Deal launched in 2014 to form
the Georgia Rural Hospital Stabilization Committee also played a role. The
panel of state legislators, local elected officials and hospital executives committed
$3 million a year for five years to a series of pilot programs.
“With these
small rural hospitals, everybody is trying to figure out how they’re going to
make payroll at the end of the week,” said Georgia Rep. Terry England,
R-Auburn, one of the committee’s co-chairmen. “They don’t have time to think
things through. … A lot of what we’ve done is give them the breathing room to
do experimentation.”
The
private-school scholarships program also has achieved some impressive results.
The largest student-scholarship organization created after passage of the tax
credit in 2008, the Georgia GOAL Scholarship Program, had awarded 40,542
scholarships worth $157.2 million to 16,720 students as of Oct. 31, primarily
to students in low- and middle-income families.
Besides the
federal tax changes, the rural hospital tax credit program also has been hit
with a critical state audit that might be expected to affect the level of
donations.
The report,
released last month by the state Department of Audits and Accounts, concluded
the contributions to the tax credit program “did not necessarily go to the most
financially needy” hospitals and called for greater accountability and
transparency provisions.
Georgia
HEART Hospital Program LLC, which helps the 56 rural hospitals eligible for the
program market and process taxpayer contributions, strongly objected to the
findings.
Lewis said
he doesn’t believe the audit will reduce support for the program among donors.
“I think
it’s going to be more of an encouragement to clean up the program than slowing
down donations,” he said.
Lisa Kelly, president
of Georgia HEART, predicted the rural hospital tax credit program will hit its
cap this year, despite the slow start. She cited an update to IRS regulations
issued in December clarifying that businesses may take a federal income tax
deduction for the charitable contributions they make to rural hospitals as well
as a state Department of Revenue rule published last summer stating that owners
of “pass-through businesses” – including sole proprietorships, partnerships and
S corporations – can claim a tax credit through the program.
“Our
participating rural hospitals are very excited about the continued financial
support that citizens from throughout Georgia are providing to help enhance
access to rural treatment,” Kelly said in a news release issued Jan. 14. “The
availability of both a federal and state income tax benefit makes it likely
that the $60 million cap will be reached in 2020.”
ATLANTA – Gov. Brian Kemp unveiled a
$28.1 billion budget proposal Thursday that would set a new record for state
spending in fiscal 2021 despite the air of fiscal uncertainty surrounding this
year’s General Assembly session.
While the spending plan would surpass the
then-record $27.5 billion fiscal 2020 budget lawmakers passed last spring, the
increase would be far less than the $1.3 billion spending hike the legislature
adopted a year ago.
Responding to several months of declining
state tax collections, the governor ordered most state agencies last summer to
reduce their spending during the current fiscal year by 4% and by 6% percent in
fiscal 2021, which begins July 1.
“This past August, I challenged state
agencies to identify opportunities to streamline operations, eliminate
duplicative programs, and leverage technology to better serve our state’s
citizens,” Kemp wrote in his annual budget message to members of the General
Assembly. “This fiscal year (FY) 2021 budget aligns existing resources to
accomplish those objectives.”
However, some of Georgia’s biggest
spending agencies have been exempted from the cuts, including the state
Department of Education and the state’s Medicaid program overseen by the
Department of Community Health.
Just keeping up with enrollment growth in
Georgia’s public schools is a big budget driver. Kemp is asking for $257.2
million to cover enrollment growth in the schools.
Another $89.6 million is earmarked for
increased enrollment in Medicaid, an expense unrelated to the governor’s
initiatives to obtain federal waivers to tailor Georgia Medicaid to fit the
more conservative approach he wants to take with the program.
The $2,000 teacher pay raise Kemp
announced in Thursday’s State of the State address would cost the state $362.2
million next year. Another $40.7 million would be used to give state employees
making less than $40,000 a year a $1,000 raise.
One area where the state could save money
in fiscal 2021 is the annual bond package, if members of the Georgia House and
Senate don’t pile on too many additional building projects when they get their
turn with the budget.
Kemp is proposing $890 million in bonds
to finance construction projects across Georgia, down from this year’s $1.1
billion bond package.
The largest individual project on the
list would provide $70 million to expand the Savannah Convention Center on
Hutchinson Island, the first installment of what city officials hope will add
up to $210 million over three years.
The project would double the exhibit hall
space to 200,000 square feet, add a 60-foot-wide hangar door, a new entrance
with an all-glass façade, outdoor space, a 40,000-square-foot ballroom, 15
meeting rooms and 900 parking spaces. The center is frequently booked to
capacity, forcing it to turn away larger gatherings that would bring in more
revenue.
The proposed bond package also includes $54.5 million to build a new state Department of Public Safety headquarters in Atlanta, $42.8 million for a STEM research building at the University of Georgia, $34.8 million to renovate and expand Building 100 at Gwinnett Technical College, $30.7 million to expand Technology Square on the Midtown Atlanta campus of Georgia Tech and $19.5 million toward the $35 million price tag of the University of North Georgia’s Mike Cottrell College of Business in Dahlonega, due to open in 2022.
Ongoing bridge repair and replacement
projects across the state would receive a $50 million influx of bond financing.
The governor earmarked about $2.9 million
to beef up the gang task force he created last year by adding seven new
positions.
A commission the General Assembly created
last year to oversee Georgia’s new medical cannabis program would receive
$354,577. Supporters of expanding the availability of cannabis oil in Georgia
to treat a number of diseases have been complaining about the program’s slow
start due to a lack of funding.
Another $316,461 would go toward
increasing election security as the state switches over to new voting machines
that feature both electronic touch screens and paper ballot backups.
Many of Kemp’s spending requests would be
spread over the fiscal 2020 mid-year budget and the fiscal 2021 spending plan.
The governor is recommending $27.4
billion for the mid-year budget, which would cover state spending through June
30. That represents a slight cut from the current $27.5 billion spending plan.
E-cigarette advertising would be sanitized under Senate bill. (Stock photo by Lindsay Fox)
ATLANTA – Buying cigarettes could get a little bit tougher for kids in Georgia under a new bill before the 2020 General Assembly.
Sponsored by Sen. Renee Unterman, Senate Bill 298 would raise Georgia’s legal minimum age to purchase tobacco and vaping products from age 18 to 21. It would also force e-cigarette companies to sanitize their advertising, barring them from calling their products kid-friendly names like “kandeez” or “bubble gum.”
The bill would also prohibit parents from
purchasing tobacco and vaping products for their children. Doing so could land
the purchaser a felony charge for third and subsequent offenses.
It’s the first Georgia bill targeting
e-cigarettes and other vaping products filed in the 2020 legislative session.
It would not ban flavored vaping cartridges, which some state lawmakers like
House Health and Human Services Committee Chairman Sharon Cooper have threatened
to do.
Vaping opponents argue the flavors and
catchy names attract children, while supporters argue banning flavors could
bankrupt small businesses that sell the nicotine-infused cartridges.
State legislatures in New Jersey and
Massachusetts have passed flavor bans.
Sen. Renee Unterman
Unterman, R-Buford, said her bill aims to protect children, particularly from becoming addicted to nicotine via e-cigarettes. U.S. Food and Drug Administration research shows nearly 4 million middle and high school students used vaping products in 2018, a large increase from the prior year.
The measure follows 41 cases of vaping-related lung illness seen in Georgia by the state Department of Public Health as of this month. That includes six deaths.
“The purpose is to curb addiction among
children,” Unterman said. “Unfortunately, with vaping, it might be a killer.”
Vaping supporters argue the activity is a safer alternative to smoking tobacco and can help addicted smokers kick the habit. Nearly 500,000 people die each year in the U.S. from tobacco-caused diseases, according to the Centers for Disease Control and Prevention.
