German automaker Porsche opened its North American headquarters near Atlanta’s airport in 2015.
ATLANTA – Gov. Brian Kemp is spending the rest of the week
in Germany on his second economic development mission since taking office last
year.
Kemp left on Tuesday, accompanied by First Lady Marty Kemp
and Pat Wilson, commissioner of the Georgia Department of Economic Development.
They will return to Georgia on Saturday.
The trip will be highlighted by the opening of the economic
development agency’s new Europe office in Munich, which is relocating from its
old digs into a larger space. The delegation also will visit with large and
small German companies with a Georgia presence, including manufacturers with
operations in the Peach State.
“Marty and I are honored to travel to Germany – Georgia’s
fourth largest export market … to reaffirm our strategic partnership and
strengthen business ties across multiple industry sectors,” Kemp said.
There are more than 800 German companies with facilities in
Georgia employing more than 36,000, including the North American headquarters
of Mercedes-Benz in Sandy Springs and Porsche near Hartsfield-Jackson Atlanta
International Airport.
Georgia exports to Germany in 2018 were valued at $2.29
billion, while Georgia imported $9.8 billion in goods from Germany that year,
making Germany Georgia’s No.-2 source of imports.
About 107,800 Germans visited Georgia in 2018 and spent more
than $181.1 million, making it a top volume tourism market for the state.
“Georgia’s official presence in Europe for more than 45
years has led to investments from some of Germany’s largest corporations, and
these strategic investments have paid off,” Wilson said. “We are grateful to
have Governor and First Lady Kemp joining us to open our new, expanded office
in the Bavarian region and to deepen our mutual commitment with economic
development partners and industries so we can continue to build on this
foundation for an even stronger future.”
Kemp’s first overseas trip as governor took place last June,
when he spent four days in South Korea meeting with political leaders and
executives from companies doing business in Georgia.
ATLANTA – Most state agency heads who appeared before legislative budget writers Tuesday vowed to do more with less to meet the spending-reduction targets Gov. Brian Kemp has set for them.
But Georgia Commissioner of Agriculture
Gary Black warned job losses in his department could seriously hamper the
state’s No.1 industry.
On the first day of hearings on Kemp’s
$28.1 billion fiscal 2021 budget plan, Black said he has been forced to
eliminate 18 full-time vacancies, four part-time vacancies, phase out six
employees and cut loose four call-center workers by not renewing their
contract.
“These critical positions in food safety,
animal industry, meat inspection and marketing were not held in reserve on the
books,” Black told members of the Georgia House and Senate Appropriations
Committees. “These were vacant positions we would have tried to fill, but due
to a competitive job market, we have been unable to find qualified applicants.”
With state tax revenue growing far slower
than had been anticipated, Kemp ordered most state agencies last summer to
reduce spending by 4% during this fiscal year and 6% during fiscal 2021, which
begins in July.
Most department heads who presented their
budgets to lawmakers Tuesday expressed confidence they would be able to hit
those targets without hurting services.
“Our cuts were designed to minimize any
impact on our operations,” said Richard Dunn, director of the Georgia
Environmental Protection Division. “I believe we’ve accomplished that.”
Some lawmakers noted the difference in
tone between agency heads elected by Georgia voters like Black and several
Kemp-appointed department officials who spoke Tuesday afternoon.
Elected officials seemed more willing to
open up about concerns over the potential impact of cuts, said state Sen. Jen
Jordan, D-Atlanta. Kemp’s department heads painted a rosier picture, she said.
“It just makes me wonder what the agency
heads really think about the cuts they’ve had to make,” Jordan said after
Tuesday’s hearing.
She expects a deeper dive on reduction
details in upcoming subcommittee meetings might shed more light on operational
and staffing impacts if the cuts take effect.
“I think there are going to be a lot of
really unhappy people in this state,” Jordan said.
For his part, Black said he has never
viewed “across-the-board” cuts as good strategic planning.
Rep. Carolyn Hugley, D-Columbus,
expressed concerns over whether the job losses would affect food safety in
Georgia.
“What is our obligation to the public?”
she asked Black.
“You have my word that the team we have
on the ground will do its job every day,” Black answered. “But with reductions
in staff, you simply can’t cover the territory as frequently as you’d like to.”
Black said his budget also calls for a
$161,000 cut in the popular Georgia Grown program, which markets the state’s
farm products.
The agriculture department also needs $1
million to jump-start the growth of industrial hemp in Georgia, a lucrative
crop the General Assembly voted to legalize last year.
Kemp’s budget proposes giving the new
Georgia Access to Medical Cannabis Commission $200,000 this fiscal year and
just under $155,000 for fiscal 2021. Part of Secretary of State Brad
Raffensperger’s office, the commission is the oversight arm of Georgia’s
fledgling medical cannabis sector.
But those funding amounts “may be
inadequate” to run the cannabis commission full-steam, Raffensperger said
Tuesday, noting his staff wants a budget closer to $500,000.
Employees at the Public Service
Commission would have to take five furlough days per year to meet the budget
cuts, said Commissioner Chuck Eaton, who was elected chairman of the PSC
Tuesday by his commission colleagues. He said the furloughs and other
cuts would make it tougher for the agency to regulate the state’s energy
utilities.
“We are way down to the bone,” Eaton said
at Tuesday’s hearing. “There is no discretionary spending left.”
The Department of Driver Services plans
to cut nearly $1.4 million this fiscal year and $2.3 million next year by
eliminating vacant staff positions in the busy license issuance branch and
renewing more licenses online via the federal REAL ID program, said DDS Commissioner
Spencer Moore.
ATLANTA – Gov.
Brian Kemp Tuesday unveiled the specifics of a crackdown on human trafficking
he proposed in more broad terms in last week’s State of the State address to
the General Assembly.
Kemp asked the
legislature to support three bills that would tighten restrictions in existing state
law targeting human traffickers and, in one case, implement a federal rule promulgated
last year by the U.S. Department of Transportation.
When he took
office last year, Kemp made going after human traffickers a high priority,
citing Georgia’s unenviable status as a state with one of the highest rates of
human trafficking in the nation. He formed a state commission to tackle the
issue and installed his wife, first lady Marty Kemp, as one of three co-chairs.
“We’ve been
working around the clock for the past year … fighting this fight to end human
trafficking,” Kemp said during a ceremony announcing his bills. “These pieces
of legislation represent a bold next step in this fight.”
The bills
Kemp plans to introduce during the coming days would:
allow victims of human trafficking to
restrict access to their criminal records. Victims caught up in prostitution networks
formed by traffickers often have trouble finding jobs and/or places to live.
close a loophole in the state’s sex
offender registry law that does not require Georgians convicted of a felony for
keeping a place of prostitution, pimping and pandering to register as a sex
offender. The legislation also would criminalize improper sexual contact by a
foster parent .
allow the state to revoke the
commercial driver’s license of anyone convicted of trafficking an individual
for labor servitude or sexual servitude, in accordance with a new federal rule.
First Lady Marty Kemp said the need to add foster parents to
the state’s improper sexual contact code was brought to the GRACE Commission’s
attention by an actual case.
“There is no consent between a foster parent and a child in
his or her custody,” she said. “The law needs to reflect that.”
Lt. Gov. Geoff Duncan, a member of the GRACE Commission, said
stories from victims of human trafficking around the state helped generate the
legislative package Kemp unveiled Tuesday.
“We’ve taken these opportunities to create legislation that’s
going to truly make a difference,” he said.
“We care about the vulnerable, the forgotten, the hurting,”
added Georgia House Speaker Pro Tempore Jan Jones, R-Milton, another of the
commission’s co-chairs. “The perpetrators will have no safe harbor in Georgia.”
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.
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.”
