Unsurprisingly, the 2020 legislative session, still in its infancy, has been consumed by the General Assembly’s one constitutional obligation—passing a state budget—a task complicated by declining revenue and a Governor with clear (and expensive) priorities. Republican Governor Brian Kemp unveiled a $28.1 billion proposal for FY 2021 which reflects budget cuts for almost all state agencies. Since its release, the Governor has presented his priorities through appearances at budget hearings and his annual State of the State address. While the Governor’s recommendation has significant agenda setting power, it is simply a suggestion to the General Assembly, which ultimately has the power to appropriate state funds.
In addition to the budget a few legislative proposals have
received attention thus far, including House Bill 276, adopted by the General
Assembly and which makes changes to how sales taxes are collected from online
purchases; a human trafficking bill promoted by the Governor; and an election
bill that has the potential to upend the race for the US Senate seat currently
held by Republican Kelly Loeffler, who was appointed by Gov. Kemp in December
after Johnny Isakson announced he was retiring due to health reasons.
I. State budget
The Governor’s proposed budget aims to save about $200 million this fiscal year and $300 million next year, without negatively impact state services. The budget recommends reduced funding for a host of agencies and programs, including accountability courts, public defenders, county health departments and state Department of Agriculture initiatives. The majority of the reductions are funded by eliminating vacant jobs, about 1,200 of them according to The Atlanta Journal-Constitution. Those positions would include Department of Agriculture food safety inspectors and marketing staff, child welfare and program eligibility workers, agricultural extension employees, Georgia Bureau of Investigation lab scientists and technicians, juvenile justice security staff, and veterans affairs workers.
Notably, Gov. Kemp exempted from the budget cuts K-12 education, most college programs, Medicaid and funding for roads and bridges. Additionally, the Governor has been quick to point out it’s not all bad news. In fact, the budget includes additional funding for isolated schools, park/green space acquisition, lab equipment to test rural water systems, $51 million to state Department of Transportation for roadways, and $50 million in general obligation bonds to repair and replace bridges.
That being said, members of the General Assembly want to review all of the budget recommendations. As is tradition, the budget that is passed through the House and Senate will look drastically different than what is proposed by the Governor. As to what exactly the General Assembly will change, there are a few large buckets of spending to keep an eye on.
The Governor’s budget includes the second half of the $5,000 pay raise he promised public school teachers during the 2018 gubernatorial campaign. Specifically, it allocates $362.2 million to provide a $2,000 pay raise for public school teachers (on top of the $3,000 approved last year. About half of that money comes from a reduction in what the state will need to put into the teacher pension system. In addition the proposed budget fully funds the QBE formula and includes $346 million in borrowing for K-12 school projects.
It should be noted that the teacher pay raise isn’t necessarily a done deal. In fact, Speaker David Ralston (R-Blue Ridge) said that the increase “was not my campaign promise.” The proposed raise is sure to face scrutiny amidst other cuts that rural legislators argue disproportionately harm their constituents.
Rural prosperity and agriculture
Rural-focused programs facing cuts include the Center for Rural Prosperity, a program cherished by Speaker Ralston and the Cooperative Extension Service and agriculture experiment stations, which would see reductions of $7.6 million next year. State Rep. Sam Watson (R-Moultrie) noted that he speaks with his local ag extension agent frequently and that the program has been essential to getting farmers through “the hurricanes, the disasters, the trade wars.”
The budget also eliminates funding for a rural water association and forest protection, and limits the Department of Agriculture’s ability to fill food safety inspection positions.
Health care has been top of mind for legislators throughout the biennial legislative session, as demonstrated by last sessions Medicaid waiver bill, certificate of need reform battle and study committee on maternal health. Front of mind in each of these discussion was the rural health care crisis. Still in the early stages of the budget process, the cuts to health care services are alarming members of both parties, particularly as they relate to rural care.
One of the main points of concern surrounds proposed cuts in funding for county health department grants, including a $6.4 million cut in 2020 and a $9.24 million cut in 2021. That, combined with reductions to loan forgiveness for rural health care professionals, rural surgery initiatives and doctor training focused on rural care has sounded an alarm on the budget committees, which are dominated by rural lawmakers.
The cuts to the county health departments could be particularly damaging given that in many rural counties doctors are few and far between and a large portion of health-related services falls to County departments. Additionally, cuts to the Georgia Department of Behavior Health and Developmental Disabilities, which provides services to mentally unstable or addicted individuals, is proving to be a point of contention at the capitol. DBHDD Commissioner Judy Fitzgerald told legislators the safety net “is stretched to the max” and any cut in funding would lead to a disruption in services to the most vulnerable. Her passionate presentation left a mark on lawmakers, many of whom are concerned with the significant increase in mental health and substance abuse problems in the state.
One aspect of the budget Gov. Kemp is keen on bolstering are programs to address violent crime. The budget designates $2 million to increase staff resources for the GBI Gang Taskforce to dismantle gang and human trafficking operations, $3 million for the recruitment and retention of state prosecutors and $435,182 for State Inspector General Deborah Wallace to address sexual harassment complaints.
In addition to bolstering law enforcement efforts, Gov. Kemp’s budget proposal cuts funding to accountability courts, a core element of former Gov. Nathan Deal’s criminal justice reform package. These courts are geared to drug addicts, veterans and the mentally ill, who have mostly been charged with nonviolent or low-level offenses, directing them toward help and away from prisons.
A University of Georgia study found that the roughly 1,700 people who graduated from accountability courts in 2017 saved the state nearly $5,000 per person when compared with the cost of incarceration.
Many judges, including Georgia Supreme Court Chief Justice Harold Melton, have been critical of the decision. Melton warned that “you may be directing people to more expensive and less efficient alternatives.” This argument has been echoed by others who worry that short-term cuts to the program will lead to more substantial long-term financial commitments from the state. In addition to cutting funding for the accountability court program the Governor has proposed reducing spending on Georgia’s public defender network by $3.5 million.
II. Online retailers tax
Prior to fully diving into the budget process, the General Assembly was able to pass House Bill 276. The bill, which would put the burden of tax collection on online retailers, seeks to collect sales tax from online and third-party platforms selling retail products, thus leveling the playing field for Georgia-based brick-and-mortar retailers and increasing revenue for the state. After the bill almost passed last year, a conference committee was appointed from the House and Senate which produced a compromise bill that was approved by both chambers.
Unsurprisingly, the passage of the bill has now been incorporated into budget considerations. State Rep. David Knight (R-Griffin) asked Kelly Farr, the Director of the Governor’s Office of Planning and Budget, if the governor had considered raising the estimate of tax collections for next year to account for new sales tax money coming in from Internet- and app-based companies. A higher estimate of what lawmakers could spend would allow lawmakers to curb some of the spending cuts.
Farr told lawmakers that he would advise against relying on estimates of how much a new tax bill would bring in.
III. Income tax
In 2018, state lawmakers reduced the state income tax rate
to 5.75 percent from 6 percent, with a plan to reduce it again this year, to
5.5 percent. However, due to declining revenues and questions regarding the
political benefit of another cut, many under the Gold Dome are rethinking the
plan. In fact, State Senate Finance Chairman Chuck Hufstetler (R-Rome) threw
cold water on the idea, saying “I don’t see the math there right now”. Notably,
the Governor did not include the tax cut in his budget so lawmakers would have
to find the money themselves should they want to move forward.
IV. Human tracking
Gov. Kemp is promoting new legislation to address human trafficking that will be carried by State Reps. Houston Gaines (R-Athens) and. Ed Setzler (R- Acworth) and State Sen. Brian Strickland (R-Stockbridge). The legislation has three elements. First, it would require people convicted of some trafficking crimes to register as sex offenders. Second, it would ban convicted sex traffickers from holding a commercial driver’s license if they are convicted of using a commercial vehicle to commit the offense. And third, it would make it easier for victims to restrict access to their criminal records or secure a judicial order that sets aside judgments issued for those who were wrongly convicted.
What would usually be a mundane housekeeping bill has the
potential to shake up the race for Georgia’s US Senate seat currently held by
Sen. Loeffler. House Bill 757 primarily clarifies the right of the Secretary of
State to set an early-March qualifying date for candidates, Democratic and
Republican, that would like to challenge Sen. Loeffler. Interestingly, House
Minority Leader Bob Trammell (D-Luthersville) went public with a proposal,
aimed at friends and supporters of US Rep. Doug Collins (R), to amend the bill
so that instead of a jungle election that would probably lead to a run-off
(which Republicans historically over the past 30 years have won), there would
be two traditional party primaries and then a general election. Somewhat
unexpectedly, that amendment was added and, this morning, the bill passed out
of the House Governmental Affairs Committee. Gov. Kemp is strongly against any
the change. However, Rep. Collins, a former Georgia House member, is close to
both Speaker Ralston and other influential Republicans. It is possible, yet
unlikely, that an interparty spat could evolve and ultimately alter the
national political landscape by increasing the chances that Rep. Collins, who
is expected to enter the race against Loeffler, is able to prevail in a party
Until proven otherwise, in 2020, the budget is king. The Governor has made his priorities clear: teacher pay raises, infrastructure, curbing gang violence and tackling human trafficking. Now it is up to the General Assembly to determine where, if at all, its priorities line up with those of the Governor and how far it is willing to go in irking a Governor with a sky-high approval rating state-wide.