Ga. House OK’s 2018 ‘Little Budget’

The Georgia House of Representatives approved last week a midyear spending bill to make use of additional revenues for fiscal year 2018, appropriating more than $300 million in new money.

The supplemental budget, known around the capitol as the “Little Budget,” will keep state agencies and offices running through June 30, when a new fiscal year will begin.

More than a third of the newly apportioned revenue will go to public schools and colleges. Other tens of millions will be directed to health care programs serving poor Georgians.

The so-called Little Budget now goes to the Senate for consideration, and its eminent passage brings the General Assembly one step closer to addressing and completing its singular constitutional obligation: passing a balanced spending plan, known as the Big Budget, for the next fiscal year.

Elsewhere in the capitol …

A House education subcommittee green lighted a proposal to address supplemental funding inequities for charter schools across the state, while another committee approved legislation providing for a new sales tax exemption to help pay for a potential expansion by the Georgia Aquarium.

Senator Brandon Beach has introduced his long-awaited transit reform bill, which would create new transit funding mechanisms through an optional local sales tax. The stipulates that MARTA would operate any service funded by the new tax. Specifically, the bill would:

  • Provide for a 1% Transit SPLOST and excluding that tax from the 2% cap;
  • Allow counties to fund transit projects within their jurisdiction, subject to approval of those projects by the Commission, and referenda would be carried out in accordance with other such SPLOSTs.  Approved projects would then be evaluated and prioritized by the local jurisdictions affected in conjunction with MARTA.  Local jurisdictions will also have the option to execute intergovernmental agreements with MARTA under which MARTA would assume control of future transit services.  For all intents and purposes, this bill would appear to impact 13 metro Atlanta counties: Cherokee, Clayton, Coweta, Cobb, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding, and Rockdale; and
  • Create the Atlanta-region Transit Link “ATL” Commission as a new division under the Georgia Regional Transportation Commission. The purpose of this Commission is to plan and coordinate the provision of transit services, the establishment of transit facilities, and the funding of those purposes throughout its jurisdiction. This jurisdiction consists of any county which has approved a MARTA tax or any county which has approved a Transit SPLOST.  Initially the Commission would consist of 11 members.

Spurred by recommendations from House Rural Development Council, legislation has been introduced in the House that would finance the cost of developing rural broadband with a new tax on digital content streaming services like Netflix.

Greitens OKs budget, withholding $251mm

Late Friday afternoon Governor Eric Greitens signed Missouri’s nearly $28billion fiscal year 2018 budget into law.  At the same time, he announced he would be withholding $251 million to help balance the budget, as revenue has not grown as quickly as expected.  Fiscal Year 2018 begins July 1.

Most of the withholds are from the Department of Social Services and the Department of Higher Education, including an additional withhold from the higher education core funding which brings the core funding for higher education to 9 percent  below FY2017.

He did not withhold any funds from the foundation formula.  As a result, the formula is expected to be fully funded.  He did withhold some funds from K-12 transportation funding.

You can read the withholds here and here.

Governor Greitens Vetoes Fund Sweep Legislation

The governor also announced he was going to veto House Committee Bill 3 which would have directed the Commissioner of Administration to sweep funds from state funds into general revenue to pay for long-term care and nursing homes.

Proponents of the legislation felt it was a necessary to keep vulnerable Missourians in their homes.  Opponents felt it was an unconstitutional one -time fix to a long-term problem.

Governor Greitens Signs Workplace Discrimination Legislation

Governor Greitens also signed Senate Bill 43 (Gary Romine-Farmington).  This legislation will raise the standard of proof for employment discrimination cases under the Missouri Human Rights Act, exempts supervisors and managers who are not employers from being sued for discriminatory conduct, and set caps on damages awarded to successful plaintiffs.

Supporters of the bill believe it will improve the state’s economic climate and foster job growth. Opponents of the bill say it guts the Missouri Human Rights Act.

Governor Greitens Announces Plans on Minimum Wage Preemption

Lastly, Governor Eric Greitens announced that he would allow the legislation that will prevent municipalities from raising the minimum wage to become law without his signature.  The law will go into effect on August 28, 2017.  Currently, the City of Saint Louis is the only municipality with a minimum wage higher than the state’s minimum wage.  Therefore, on August 29, the minimum wage in Saint Louis City will go from $10/hour back down to $7.70.

Budget advances in Missouri

The state’s $27billion budget was advanced out of the House Budget committee this week. While few changes were made, there was a bit of surprise when Kirkwood Democrat Deb Lavender offered an amendment, which was approved, that took more than $6million from Missouri Attorney General Josh Hawley’s office and gave it to the state’s Public Defenders. It is expected that there will be an effort to move the money back to the Attorney General’s office.

The House appropriations staff has announced the budget bills will be heard on the House Floor next Tuesday and third read and sent to the Senate on Thursday.

House Passes Bill Repealing Prevailing Wage

On Thursday, the Missouri House sent Warren Love’s (R-Osceola) bill that repeals Missouri’s prevailing wage law to the Senate. While House and Senate leadership have pledged to pass several bills that are viewed by democrats as anti-labor, the repeal of prevailing wage is widely viewed as the most contentious because repealing prevailing wage will directly impact the salaries of union members. Under current law, contractors and subcontractors working on public works projects are required to pay employees the prevailing wage for the particular locality in which the project is being completed. This bill changes the law to require contractors and subcontractors to pay employees state or federal minimum wage, whichever is higher. Contractors and subcontractors would be permitted to pay higher than the minimum wage, but that would not be a requirement.

The bill is expected to move through the Senate Committee process quickly, but will likely face a filibuster from pro-labor Senators.

House Sends Real ID Legislation to the Senate

After giving Congress and the President a month to repeal the Federal Real ID requirements, the House voted to send a bill that would give Missourians the option to choose a Real ID to the Senate. Missouri is one of a handful of states that has yet to comply with the Federal law. If the legislature does not approve this bill, Missourians will need a passport to fly domestically and will be unable to use their Missouri driver’s licenses to enter federal facilities.

Course Access is One Step Closer to the Governor’s Desk

This week the Senate Education Committee heard Representative Bryan Spencer’s (R-St. Charles) course access bill. This legislation would ensure that Missouri’s students would have access to the courses they need to be successful in college and career. This bill is a priority of both Governor Eric Greitens and Speaker Richardson. No action was taken on the bill.

Economic Development Legislation on the Move

The House committee on Local Government heard Senator Wasson’s (R-Christian County) bill that will modify the language relating to agreements that may be entered into by municipalities who participate in industrial development projects. The bill easily passed the Senate. No action was taken on the bill.

Additionally, the Senate Education Committee heard Representative Jeanie Lauer’s (R-Jackson County) legislation that will allow students to take the ACT WorkKeys assessments instead of the ACT Plus Writing Assessment. While no action was taken on the bill this week though the Senate Education Committee is expected to vote on it next week.

House and Senate Both Perfect Legislation Dealing with Time Limited Demands

Both House and Senate leadership pledged to pass significant tort reform legislation this year, and this week another part of the tort reform agenda advanced. Each chamber passed legislation that would ensure insurance companies have adequate time to review claims before deciding to settle. Both bills will now work their way through the committee process in the other chamber.

Electric and Water Utilities Infrastructure Bills Stalled

This week Senator Ed Emery (R-Barton County) presented two utilities bills on the Senate Floor, one dealing with rate stabilization for water and sewer corporations and another dealing with ratemaking for electric utilities. Much like similar bills in the past, a handful of Senators launched a filibuster and forced Senator Emery to lay the bills over. It is possible the Senate will give these bills some additional floor-time, but they both continue to face significant opposition.

Missouri momentum: tort reform, labor reform, and ed. reform

When the House and Senate return on March 27, there will be seven weeks left before the legislature adjourns for the year. In the first half of session, before spring break, there were 1,238 House Bills filed and 544 Senate Bills filed. Two House Bills, one relating to agriculture and one changing who can be certified as an expert witness in a jury trial have been sent to the Governor and are awaiting his signature. Additionally, one Senate Bill, Right to Work, has been sent to and signed by the Governor.

Traditionally, eighty percent or more of the bills that become law are sent to the Governor in the final two weeks of session. As such there is still time for legislative leaders to accomplish their priorities. Below is a recap of where the bills with the most momentum addressing those priorities currently stand.

Tort Reform

Several tort reform measures are moving through the process. As mentioned above, the first tort measure sent to the Governor was expert witness. Several others are moving through the process including:

Collateral Source, sponsored by Senator Ed Emery (R-Barton County), has been approved by the Senate and is currently awaiting a hearing in the House Committee on Special Litigation. This bill would allow parties involved in litigation to reveal the actual cost, rather than the actual value, of medical services rendered.

Time Limited Demand and Reservation of Rights, sponsored by Representative Bruce DeGroot (R-St. Louis County), has been approved by the House and is awaiting a vote in the Senate General Laws committee. This bill will ensure insurance providers have adequate time and information when making decisions about settling claims.

Venue and Joinder is a series of bills sponsored by Representative Glen Kolkmeyer (R-Lafayette County) that have been approved by the House and are awaiting a vote in the Senate. These bills attempt to prevent plaintiffs in a lawsuit from “venue shopping” and also require that some separate complaints against the same company not be allowed to join together in one lawsuit.

Labor Reform

The GOP majority has made no secret of its desire to enact wide ranging labor reform. As mentioned above, Right to Work was the first bill sent to and signed by the Governor. Republicans have tried for several years to pass right to work but were unable to come up with enough votes to over-ride a veto from former Governor Nixon. While Right to Work is perhaps the highest profile labor reform bill, there are several other labor reform bills moving through the legislature. Some of those include:

Paycheck Protection is sponsored by Representative Jered Taylor (R-Springfield) and being handled in the Senate by Senator Bob Onder (R-St. Charles). Representative Taylor’s bill has crossed chambers and has been debated on the Senate Floor for several hours though no compromise has been reached yet. The bill would change some reporting requirements for labor organizations and employees and change the way unions are certified and decertified.

Project Labor Agreements sponsored by Senator Onder (R-St. Charles) has passed the Senate and is awaiting a hearing in the House Economic Development Committee. This bill would change the law regarding how and when municipalities had to enter into project labor agreements.

Prevailing Wage is sponsored by Senator Dan Brown (R-Rolla) and is on the Senate informal calendar. It is widely expected that this will be the most contentious of the labor reform bills and it is likely that Senate leadership will tackle this priority after most other priorities have made it out of the Senate. There is also a House prevailing wage bill sponsored by Representative Warren Love (R-Osceola) that is on the House informal calendar with an amendment pending.

Education Reform

Charter expansion is sponsored by Rebecca Roeber (R-Lee’s Summitt) and has been approved by the House and is waiting to be referred to a Senate Committee. The version the House passed expands charter schools to all school districts that have one school building with an annual performance report of 60% or less and increases accountability requirements for charter schools.

Education Savings Accounts is sponsored by both Senator Ed Emery (R-Barton County) and Senator Andrew Koenig (R-Manchester). Both of these bills have been approved by committee and are on the Senate Calendar. Senator Emery’s bill provides an education savings account to any student in Missouri who has been enrolled in a public school for one semester in the previous twelve months. Senator Koenig’s bill provides an education savings account to any student who is in foster care or has special needs.

Economic Development

Several bills attempting to cut the state’s tax credit programs have been filed and received hearings. However, Governor Greitens has appointed a committee to study the state’s tax credits and make recommendations for the programs. As such, it is unclear whether any of the measures related to the state’s existing tax credit programs will advance.
Some of the other economic development ideas that are moving include:

Missouri Works and Missouri Works Job Training Program changes which was sponsored by Senator Jay Wasson (R-Christian County) and has been approved by the Senate and is waiting to be referred to a House Committee.

Tax Increment Finance Allocation Senator Wasson is also sponsoring a bill that is on the Senate calendar that would exclude any annual amount generated by a single plan or project which is estimated to create in excess of fifteen thousand new jobs with an average annual wage of more than $75,000 from the super TIF cap.

Budget

The Governor was forced to cut $580 million from the budget request he sent the legislature in February. As a result many existing programs saw the Governor’s request cut their line item completely out of the budget while other saw drastic cuts. There were also very few new budget items included in the Governor’s request.

When House Budget Chairman Scott Fitzpatrick (R-Shell Knob) presented his changes to the Governor’s recommendations, he included several changes. The most notable change was that he used cost savings from a bill being considered now that would remove senior citizens who are renting from a tax credit program to fully fund the foundation formula. The budget must be completed by May 5, as such the expected timeline for the budget is as follows:

Week of March 27 – House Budget Committee makes changes and votes on each budget bill

Week of April 3- Budget is debated by the full House and sent to the Senate

Week of April 10- Senate Appropriations committee has hearings on the House budget

Week of April 17- Senate Appropriations committee makes final changes and votes on its version of the budget bills

Week of April 24- Full Senate debates Senate Committee version of each budget bill

Week of May 1- House and Senate appoint conferees and reconcile differences and vote to send final budget to Governor Eric Greitens

Sine Die in Illinois

The Illinois State House of Representatives and Senate adjourned sine die on Tuesday for the final day of the 99th General Assembly, leaving dead all bills filed this session, including a slate of budget compromise bills.

It is expected, however, that Senate Pres. John Cullerton will reintroduce those bills as early as Wednesday when the new General Assembly is sworn in.

House

The House passed SB 513 HA-3, which extends the sunset date of the EDGE tax credit program to April 30, 2017. The bill passed 101-12.

The House also voted on HB 6630, sponsored by Rep. Batnick, which would freeze property taxes beginning with the 2016 levy year. The bill passed 76-24-6.

SB 2799, sponsored by Rep. Breen and Sen. Collins, passed the House unanimously. This agreed bill would amend the Employee Sick Leave Act by cleaning up several provisions in the Act. Among the changes included exempting collective bargaining agreements and clarifying paid and unpaid employees are covered under the Act.

Senate

The Senate concurred on House amendments to SB 550, sponsored by Sen. Steans, which requires lead testing of the water in schools and daycare facilities.

The Senate also concurred unanimously on House amendments to SB 2799, sponsored by Sen. Collins and Rep. Breen, which again is an agreed bill that makes changes to the Employee Sick Leave Act as specified above.

The final Senate concurrence was taken on the EDGE tax credit sunset extension, HA-3 to SB 513 . The bill passed 48-7.

Budget looms large in WV’s January session

The following legislative session curtain raiser comes by way of Dentons 50 partner Jason Webb.

The biggest issue looming over West Virginia for the upcoming 2017 legislative session will be its budget. Now, the Mountain State is not alone in its fiscal challenges as many states have struggled with their own deficits. What makes WV unique is the size of the budget shortfalls in relationship to its revenues in the post-2009 economy.

WV’s budget is approximately $4 billion in general revenue, not including federal dollars which are leveraged through various matching programs. West Virginia faced a $270 million deficit last year and has an estimated a $350 million shortfall for FY2018. This will require a 16% reduction if the budget for those two fiscal years.

The ongoing budget shortfalls are directly related to the fall in revenue collections from severance taxes. Half of the deficiency in revenues stems from both lower production and lower prices of coal. The loss of over $300 million from coal’s decline has put a huge burden on this energy dependent state.

During the 2016 session, lawmakers were faced with a $270 million budget shortfall. After passing a 65-cent cigarette tax increase (which added $95 million to state coffers) and $110 million in budget cuts, legislators still needed to take $65 million from the State’s “rainy day” fund.

During the 2017 session, policymakers will again face difficult choices as to what additional cuts can be made versus raising taxes. Some of the items on the table include a 6% telecommunications tax, removing service tax exemptions for professional services and increasing sales tax from 6% to 7%.