ATLANTA – The money deposited in nine state-run trust funds could be used for no other purpose under legislation that cleared the Georgia House Appropriations Committee Friday.
House Bill 511 is the follow-up to a constitutional amendment Georgia voters ratified overwhelmingly last fall requiring all revenues the state’s dedicated trust funds collect to remain inside those programs rather than be diverted into the general fund budget.
The late Georgia Rep. Jay Powell, R-Camilla, championed the constitutional amendment for years to prevent Georgia governors and legislative leaders from raiding the state’s Solid Waste and Hazardous Waste trust funds during economic downturns when money is tight.
The constitutional amendment finally gained passage last year following the unexpected death of Powell in November 2019 at age 67.
“When we in this General Assembly create and pass a dedicated fee to go to a certain purpose … it should go to the purpose it was intended for,” Rep. Bert Reeves, R-Marietta, who has shepherded the legislation since Powell’s death, told committee members Friday.
While Powell developed the proposal with the Solid Waste and Hazardous Waste trust funds in mind, the bill the committee adopted Friday also would apply to the following:
State Children’s Trust Fund, which goes to the Georgia Division of Family and Children Services.
Wildlife Endowment Trust Fund, a tax on hunting and fishing licenses that supports state wildlife programs.
Georgia Trauma Care Network, which funds trauma care services through a fine on “super speeders.”
Transportation Trust Fund, which supports road projects through the state’s motor fuels tax.
Georgia Agricultural Trust Fund, which goes toward marketing the state’s farm products and state-run farmers’ markets.
Fireworks Trust Fund, a sales tax on fireworks that goes toward trauma care and firefighter training.
Georgia Transit Trust Fund, a per-ride tax on ride-sharing services that helps fund public transit improvements.
The constitutional amendment ratified last fall includes a 10-year sunset date to give lawmakers a chance to review each trust fund and ensure the services it helps pay for are still needed.
It allows governors and legislatures to suspend the dedication of trust fund revenues during economic emergencies to free up those funds for general spending needs.
Also, the total amount dedicated to the trust funds during a given fiscal year could not exceed 1% of the state’s budget from the previous fiscal year.
Rep. Calvin Smyre, D-Columbus, said the transit trust fund is particularly significant because it represents the first dedicated source of state funding for transit projects. The General Assembly earmarked $75 million in one-shot bond financing for transit in 2015.
“Transit has been neglected,” Smyre said. “This is a great step.”
The bill now moves to the House Rules Committee to schedule a floor vote.
ATLANTA – The federal government is stepping up with $1.5 billion to replenish Georgia’s depleted Unemployment Insurance Trust Fund, Gov. Brian Kemp announced Wednesday.
The money, which will come through the Coronavirus Aid, Relief and Economic Security (CARES) Act, will repay funds the state has borrowed to provide unemployment benefits to Georgians who lost their jobs during the pandemic.
“COVID-19 has brought unprecedented challenges to nearly every business – large and small – and upended the lives of millions of Georgians,” Kemp said. “Through no fault of their own, thousands of people became unemployed overnight, businesses were shut down, and countless families suffered.
“Today’s announcement will save Georgia employers millions of dollars in state and federal unemployment taxes, prevent significant layoffs, and save the state millions of dollars in interest payments.”
By allocating up to $1.5 billion in coronavirus relief funds to avoid raising state and federal unemployment taxes, the average Georgia employer will save about $350 per year for each employed worker.
But the state still won’t be out of the woods. With benefit payments projected to outpace tax revenue, Georgia will have to continue to borrow federal funds to pay benefits.
After the Great Recession of 2008-2009, it took three years until tax revenue outpaced benefit payments.
Unless the state raises employers’ tax rates for unemployment insurance or provides an injection of capital through another means, Georgia would have to borrow an additional $1 billion by 2023 to keep up with benefits payments, according to state Department of Labor estimates.
“Without the transfer of funds, the state will have to increase unemployment tax rates for employers between 300% and 400% to make headway on paying off the loan,” Georgia Commissioner of Labor Mark Butler said Wednesday. “This reallocation of federal funds will allow more employers across the state to focus on the growth and success of their businesses without having the additional pressure of a rising unemployment tax.”
ATLANTA – The Georgia Department of Labor (GDOL) withheld more than $105 million in penalties and fees accumulated in the last decade rather than turning it over to the state treasury, an internal audit has found.
The funds – administrative assessment fees, interest fees and employer penalties – were transferred to the treasury last week, as required by law, state Commissioner of Labor Bruce Thompson said Thursday. All of the funds were withheld during the administration of former Labor Commissioner Mark Butler, like Thompson, a Republican. Thompson took office at the beginning of January.
“This agency will no longer be shrouded in secrecy and isolation but fully cooperate with fellow state agencies and authorities to identify all fraud and corruption associated with the Unemployment Insurance Trust Fund and the department,” Thompson said.
“No one is above the law, and I hope everyone connected to this investigation voluntarily and openly cooperates with officials as we seek to put this dark history behind us.”
The 10-page audit, dated Aug. 4, does not allege fraudulent activity on the part of the labor department. Instead, it attributes the withholding of the funds to a legal disagreement.
According to the report, the money was withheld because the agency’s “upper management” was unhappy the department was not being appropriated the full amount of the fees and penalties it had collected and, as a result, withheld the funds intentionally. An in-house lawyer for the labor department believed the agency had a legal right to retain the money, the audit found.
While not alleging criminal wrongdoing, the audit concluded the practice of withholding funds from the state treasury in violation of the Georgia Constitution could encourage corruption.
“When management makes decisions to override the internal controls, policies and procedures which have been placed into operation, opportunities for fraud, waste, abuse and various forms of corruption tend to increase,” State Auditor Greg Griffin wrote. “In this case, our investigation found none of the retained funds had apparently been expended by GDOL.”
The investigation remains ongoing. State and federal agencies involved in the probe include the Georgia attorney general’s office, the U.S. Department of Labor, the state Office of Inspector General, and the Georgia Department of Audits & Accounts.
Thompson said Thursday’s announcement marks a significant step toward restoring accountability and transparency at the labor department.
ATLANTA – U.S. Sen. Jon Ossoff, D-Ga., is putting his entire stock portfolio into a blind trust, the first-year senator announced Wednesday, fulfilling a campaign promise.
Stock holdings by members of Congress became an issue early last year when the Justice Department began investigating stock transactions then-Sen. Kelly Loeffler, R-Ga., and two Senate colleagues made following a closed-door briefing during the early stages of the coronavirus pandemic.
Loeffler said the transactions were made by a third-party advisor without her input, and the Justice Department later dropped the investigation without finding any wrongdoing.
However, Loeffler later liquidated her holdings in individual stocks and converted those assets into broader exchange-traded funds and mutual funds, a step she said she took to end a distraction over false allegations.
In putting his stock holdings into a blind trust, Ossoff said he’s following an example set by former Sen. Johnny Isakson, R-Ga.
“Georgians deserve confidence that elected representatives are serving the people and not themselves,” Ossoff said. “I will continue to work in the Senate to strengthen ethics rules.”
Ethics and good government groups have pointed to blind trusts as a way to increase Americans’ faith in government by ensuring members of Congress avoid conflicts of interest and cannot trade on inside information.
ATLANTA – When the dust settled from this year’s General Assembly session, environmental advocates were looking at some success but mostly disappointments.
Lawmakers finally voted to protect state trust funds for environmental cleanup activities after years of failed efforts.
But two bills that passed the General Assembly would prohibit local governments from regulating poultry plant processing wastes or adopting building codes based on the source of energy to be used.
The trust fund legislation follows a constitutional amendment Georgia voters ratified overwhelmingly last November requiring all revenues the state’s dedicated trust funds collect to remain inside those programs rather than be diverted into the general fund budget.
The late Georgia Rep. Jay Powell, R-Camilla, who died in November 2019, championed the constitutional amendment for years to prevent Georgia governors and legislative leaders from raiding the state’s Solid Waste and Hazardous Waste trust funds during economic downturns when money is tight.
While Powell had those two environmental trust funds in mind, the final version of House Bill 511 added other trust funds to the protected list, including the
State Children’s Trust Fund, which goes to the Georgia Division of Family and Children Services.
Wildlife Endowment Trust Fund, a tax on hunting and fishing licenses that supports state wildlife programs.
Georgia Trauma Care Network, which funds trauma care services through a fine on “super speeders.”
Transportation Trust Fund, which supports road projects through the state’s motor fuels tax.
Georgia Agricultural Trust Fund, which goes toward marketing the state’s farm products and state-run farmers’ markets.
Fireworks Trust Fund, a sales tax on fireworks that goes toward trauma care and firefighter training.
Georgia Transit Trust Fund, a per-ride tax on ride-sharing services that helps fund public transit improvements.
“When we in this General Assembly create and pass a dedicated fee to go to a certain purpose … it should go to the purpose it was intended for,” Rep. Bert Reeves, R-Marietta, the bill’s chief sponsor, said during a committee hearing on the measure.
The constitutional amendment ratified last fall includes a 10-year sunset date to give lawmakers a chance to make sure the services each trust fund pays for are still needed.
It allows governors and legislatures to suspend the dedication of trust fund revenues during economic emergencies to free up those funds for general spending needs.
Also, the total amount dedicated to the trust funds during a given fiscal year may not exceed 1% of the state’s budget from the previous fiscal year.
While celebrating the win on trust funds, environmental groups and minority Democrats criticized two “preemption” bills the Republican-controlled General Assembly passed during the last two days of this year’s legislative session.
One of the measures prohibits local governments from regulating poultry processing plant wastes farmers spread on their fields as fertilizer.
The legislation was spurred by complaints from residents in several Northeast Georgia counties of foul odors emanating from farm fields.
Rep. Mary Frances Williams, D-Marietta, said waste being spread on the fields that is supposed to be limited to liquid but sometimes contains byproducts, including chicken carcasses.
“The smell is awful,” she said. “It’s been a problem people have really complained about.”
But Sen. Tyler Harper, R-Ocilla, the bill’s chief sponsor, said a late change the Georgia House of Representatives added to the measure requiring farmers to submit a nutrient management plan should give the state the tools to go after violators.
“It ensures those that are bad actors get their act together and do it right,” he said.
The other preemption bill stems from actions a handful of cities in other states have taken requiring builders to use only renewable sources of energy to power new commercial and residential buildings.
Republicans pitched the legislation as giving home- and business owners freedom to choose how they want to power their properties without government interference.
“Many homes in my district are warmed by petroleum gas,” Rep. Beth Camp, R-Concord, said during a committee debate on the bill. “If a municipality makes a decision to terminate a form of energy, they’re telling people what they can and can’t do in their homes.”
But opponents said the bill essentially was a solution looking for a problem. While Georgia cities including Atlanta, Athens and Savannah, have set goals for reducing reliance on fossil fuels, none have banned gas.
“Nobody’s going to prohibit a gas hookup,” said Neill Herring, a lobbyist for the Georgia chapter of the Sierra Club. “The bill was just a showboat.”
Environmental advocates also were disappointed with the lack of progress on addressing the 29 ash ponds Georgia Power is working to close at 11 of the utility’s coal-burning power plants.
For the second year in a row, Republican legislative leaders wouldn’t give a hearing to Democrats’ bills requiring the installation of liners for the 10 ponds being closed in place to prevent groundwater contamination.
The only legislation that did get a hearing, a proposal to tighten monitoring requirements for coal ash, passed the House but wasn’t taken up in the Senate.
“Toxic coal ash is sitting in groundwater around the state, and yet the Georgia legislature failed to pass legislation addressing this problem,” said Jennette Gayer, director of Atlanta-based Environment Georgia.
But Rep. Vance Smith, R-Pine Mountain, chief sponsor of the monitoring bill, said the solution environmentalists are seeking for coal ash is problematic.
“Liners are good if they never, ever have a default or deterioration,” he said. “But one small pinhole or a crack and you lose what you’re supposed to be doing.”
