ATLANTA – Nearly 300 state employees erroneously received unemployment benefits totaling $6.7 million and averaging $23,700 per employee during the last two pandemic years, the Georgia Office of Inspector General (OIG) reported Wednesday.
In a letter to David Dove, Gov. Brian Kemp’s executive counsel, Inspector General Mike McAfee wrote that data obtained from the U.S. Department of Labor and the State Accounting Office (SAO) tentatively identified more than 280 full-time state employees who erroneously received unemployment insurance payments in 2020 and 2021.
The OIG has conducted about two dozen interviews with employees from across state government, nearly all of whom have been terminated, McAfee wrote.
“As Governor Kemp’s administration is acutely aware, the nearly $6 trillion in emergency spending authorized by the federal government to combat the COVID-19 pandemic created new challenges in oversight and accountability,” the inspector general wrote.
“An unfortunate side effect was ‘one of the largest frauds in American history, with billions of dollars stolen by thousands of people,’ ” the letter continued, quoting from articles The New York Times and Washington Post published last year.
“Offices of inspectors general and other investigative agencies across the country continue to struggle with the sheer volume of incoming referrals. Unfortunately, this office can confirm that Georgia’s state workforce was not immune.”
The difficulties the Georgia Department of Labor faced processing a deluge of applications for unemployment benefits at the height of the pandemic have been well documented. State lawmakers were inundated with complaints from constituents over a lack of response from the labor department and subsequent delays in receiving benefits.
In 2021, the General Assembly passed legislation to create the position of chief labor officer inside the labor department who would report directly to the governor. However, Kemp vetoed the bill because the powers it would have given the new position would have put it in conflict with the constitutional authority of Georgia’s elected commissioner of labor.
While the OIG has referred cases of erroneous unemployment payments to the state Attorney General’s office for prosecution, the agency conceded it doesn’t have the resources to investigate every case.
To cope with such a large potential caseload, the letter recommends the General Assembly consider legislation extending the statute of limitations for prosecuting pandemic-related fraud and granting the OIG subpoena authority.
The inspector general also suggested the Georgia Department of Labor and SAO coordinate quarterly to make sure state employees have not submitted inaccurate or false applications for unemployment benefits.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.
ATLANTA – Georgia’s sales tax exemption on inputs used in manufacturing is a loser in the strict sense of its net impact on state and local tax revenues, according to a new audit.
However, the tax break more than pays for itself in terms of investment and jobs created in the state’s manufacturing businesses, the Center for Business Analytics and Economic Research at Georgia Southern University concluded in a report commissioned by the Georgia Department of Audits and Accounts.
The General Assembly eliminated the state sales tax on energy used in manufacturing a decade ago, adding it to other exemptions on production inputs already in state law, including equipment, industrial materials and packaging supplies.
The tax exemption on all of those manufacturing inputs cost state and local governments almost $6 billion in tax revenues on average during each of the last five fiscal years, according to the audit. After accounting for the increase in taxes generated by economic activity related to manufacturing, the net cost of the exemptions totaled $2.7 billion per year, the report found.
But those numbers pale in comparison to the $122.5 billion in average annual economic output generated during the five-year survey period by businesses that used the sales tax exemption.
The audit found that additional economic activity supported 171,125 jobs directly with an average salary of $77,450 per year, and 424,333 jobs in total with an average annual salary of $68,909.
“The total net tax revenue only tells part of the impact of this sales tax exemption,” the report stated. “From an economic development standpoint, without the sales tax exemption, 2% to 25% of the overall economic impact would not have been retained by or relocated to Georgia over the analyzed time frame.
“Using the data from the ‘but-for’ analysis, there would be 3,423 to 42,781 fewer direct jobs in Georgia. The loss of these direct jobs would have reduced total employment by 8,487 or 106,083.”
The audit also concluded the manufacturing sales tax exemption helps the state avoid the “pyramiding” of sales taxes paid by the customers who buy manufactured products. Manufacturers typically pass on the costs of the sales taxes they pay to consumers.
Since pyramiding of sales taxes drives up the costs of products, Georgia manufacturers forced to pass on the cost of taxes could lose sales to competitors in other states that use sales tax exemptions to keep the price of their products lower, the report found.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.
ATLANTA – Gov. Brian Kemp announced a new round of grants Wednesday that will send more than $235 million in federal pandemic relief funds to broadband projects in 28 Georgia counties.
When combined with significant local matches, nearly $455 million will be used to serve more than 76,000 locations across the state, many in rural communities most in need of high-speed internet access.
“Georgia is again leading the nation in identifying where the digital divide is the deepest and acting on that knowledge to improve service,” Kemp said. “These projects announced today will go a long way to helping Georgians in some of the most unserved and underserved parts of the state become better connected.”
The 29 grants range in size from $18.4 million going to Spectrum Southeast in Madison County in Northeast Georgia to almost $3 million headed to locations served by Comcast Cable Communications in Hancock County near Milledgeville.
The winning internet service providers applied for grants after the governor announced this round of funding last August.
The grant awards announced Wednesday follow an earlier round of funding last February of $408 million in pandemic relief aid. Together, the two rounds of funding are aimed at serving about 200,000 of the remaining 455,000 unserved locations in Georgia.
The state plans to open another round of grant funding for the five eligible counties that have not received grants thus far: Calhoun, Echols, Johnson, Miller, and Webster counties.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.
ATLANTA – The widow of the late Georgia House Speaker David Ralston is headed into a runoff in a special election for Ralston’s Northwest Georgia House seat.
Sheree Ralston, executive director of the Fannin County Development Authority, received 45% of the vote Tuesday in a five-way race in House District 7. Fellow Republican Johnny Chastain, a banker, finished second with 39%, well ahead of three other candidates who were held to single digits.
Since neither Ralston nor Chastain won a majority of the vote, the two will head to a runoff on Jan. 31 to decide the winner in District 7, which includes Fannin and Gilmer counties and part of Dawson County.
David Ralston, R-Blue Ridge, died in November at the age of 68 following an extended illness. He had served as House speaker for 12 years.
Just two days before his death, Ralston announced he would not seek another two-year term as speaker. The House Republican Caucus has nominated Majority Leader Jon Burns, R-Newington, to step up to speaker when the General Assembly convenes next week.
The full House will vote on Burns’ nomination on Monday, the opening day of the 2023 legislative session.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.
ATLANTA – A newly elected state representative from Barrow County is stepping down before the General Assembly convenes its 2023 legislative session next week.
Republican Rep.-elect Danny Rampey, 67, was arrested and charged with stealing prescription drugs from an assisted living complex he manages in Winder, the Athens Banner-Herald reported last month.
Rampey chose to resign the seat he just won rather than face being suspended from the General Assembly after lawmakers are sworn in next Monday.
Gov. Brian Kemp has scheduled a special election for Jan. 31 to fill the House District 119 seat, which includes a major portion of Barrow County.
“His withdrawal will ensure his constituents have a voice in this session of the General Assembly after the special election is held,” House Speaker Jan Jones, R-Milton, and Speaker-Nominee Jon Burns, R-Newington, wrote in a joint statement.
Rampey was elected without opposition in November, receiving 18,484 votes.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.
