The Final Breath From This Year’s Georgia General Assembly
Mike Klein
The final breath has been drawn by this year’s Georgia General Assembly. Here is what lawmakers did on seven issues that are closely tracked by the Georgia Public Policy Foundation. This article discusses state charter schools, digital learning, criminal and juvenile justice reform, pension and tax reform, and health care. All of these will require more work going forward and in some cases, much more work starting soon.
State Charter Schools
This November voters will decide who got it right: Lawmakers four years ago when they created a state charter schools commission or the state Supreme Court last spring when it ruled that the commission was unconstitutional. The very fact that voters – not the state Supreme Court and not legislators – will settle this question was by no means assured during the session.
House Resolution 1162 faced a significant hurdle to achieve a two-thirds House super majority and it almost collapsed in the Senate. Opposition came from some of the state’s largest school systems and organizations that represent school boards, superintendents and teachers. Those groups were focused on how to stop voters from having a chance to decide the question.
They might have prevailed until the Senate’s two longest serving members – Democrats George Hooks and Steve Thompson – delivered powerful chamber speeches to explain why they would vote yes. Hooks, Thompson and two other Democrats joined all 36 Republicans to vote for the constitutional amendment resolution. Another “yes” vote in November would start development of a new commission whose bones are contained in House Bill 797.
The commission could approve virtual or brick-and-mortar schools. Students could live within defined local boundaries for traditional schools or statewide for virtual schools. The commission would consider applications only from groups that were already rejected by local school boards. Those same local boards would be permitted to explain why they rejected the application.
New and existing state commission charter schools would receive only state dollars. Traditional schools would be paid operating expenses figured on the state’s school funding formula for the lowest five school systems based on assessed valuation, plus a or capital expenditures amount. Virtual schools would receive two-thirds of the amount given to traditional schools for operating expenses. Schools that offer blended learning – online with a teacher – could receive some capital funding at the discretion of the commission.
“No” from voters in November would render House Bill 797 unnecessary.
Resources: House Resolution 1162. House Bill 797
Digital Learning
State-based digital learning is about to explode in Georgia. Two bills are responsible.
House Bill 175 actually was introduced and passed the House last year. This year it passed the Senate. The bill establishes a clearinghouse of online learning courses that would be managed by Georgia Virtual School (GAVS) at the Department of Education. Courses could originate with public school systems – such as Cobb, Forsyth and Gwinnett school systems that have robust online curriculum – or from other sources that could include online learning companies.
This clearinghouse method has the potential to create vast amounts of content that could be available to any student who has online access anywhere in the state. GAVS serves about 10,000 students with courses that supplement their traditional bricks-and-mortar classroom work. The expectation is that GAVS could serve 100,000 students within just a few years.
Senate Bill 289 takes digital learning another step forward; it directs the state board of education to ramp high school digital learning resources for today’s current sixth graders before they are freshmen in fall 2014. The original Senate bill said those students who are scheduled to graduate in spring 2018 would be required to take at least one online learning course before high school graduation but that language was changed to “maximize the number.”
The clearinghouse would also be managed through the Georgia Virtual School.
Resources: Senate Bill 289. House Bill 175.
Criminal Justice Reform
When the final ink was dry, everyone agreed it is time to move forward with widespread reform. The House voted 162-0 and the Senate 51-0 on final legislation that will emphasize treatment programs over hard-time incarceration for some property crime offenders and low-level drug users. From the beginning supporters said these are not going-soft-on-crime strategies.
New ideas adopted this year recognize the state cannot continue to absorb more than the $1.5 billion per year that it spends on prisons, parole and probation. State prisons hold 56,000 inmates and each day local jails contain hundreds to thousands of inmates who are waiting for an empty state bed. Georgia also has 22,000 adult parolees and 156,000 on felony probation.
New ideas will take years to fully incorporate. They include new and expanded accountability courts, especially drug and mental health courts that will reroute eligible offenders into treatment programs with severe oversight. New definitions and penalty levels were established for several property crimes including theft, burglary, shoplifting and forgery.
The state will move toward prosecution of drug offenses based on the type and weight of drugs to clarify the distinction between casual users, sellers and traffickers. Child abuse laws were tightened as were requirements for reporting suspected sexual abuse and suspicion of human trafficking.
Criminal justice reform is not a single year issue. It will take money and time to develop public and private resources. Sheriffs and the county district attorneys are concerned about the impact of reform on their budgets, facilities and staffs. Everyone already knows this will take a steep learning curve and come corrections are likely. Governor Nathan Deal kept the Special Council on Criminal Justice Reform intact and it is expected to have new assignments this year.
Resources: House Bill 1176. Policy Foundation Issue Analysis.
Juvenile Justice Reform
The outlook was bright when the House voted 172 – 0 to pass ambitious legislation that would rewrite nearly every section of the state’s juvenile code. But the outlook proved to be too bright when the Governor’s Office said it wanted more financial analysis and the current bill died.
Much like adult criminal justice reforms, the bill emphasized treatment over incarceration when appropriate for juveniles. It also made changes to policies that regulate foster care, permanent placement hearings, adoption codes, family mitigation hearings, children who are status offenders and the rights of parents. None of the changes would be enacted until July 1, 2013.
Advocates – and there are many inside and outside government — believed they could work out funding details before July 2013 and during the next General Assembly. That strategy came up short at the Governor’s Office and the bill never reached the Senate. It has been at least five years since hard work was begun to rewrite the code and it will be at least one more.
Resources: House Bill 641. Policy Foundation Issue Analysis.
Pension Investment Reform
Pension investment management is an ongoing hedge that contributions and investment returns will continue to generate the cash flow required to pay benefits. Public sector pensions nationally have started to come under pressure as baby boomers began to claim retirements while equity investments were losing billions of dollars and other state revenues were shrinking. Georgia has taken a small step forward to help stabilize its pension system investment returns.
Senate Bill 402 would permit the Employees Retirement System to allocate up to but not more than 5 percent of its available assets into alternative investments that include venture capital pools and other private placements specifically named in the legislation. ERS had $14.9 billion invested on June 30 of last year, about two-thirds in equities and the remainder primarily in U.S. Treasury notes or bonds. Currently, the 5 percent threshold would be about $750 million. The Teachers Retirement System is exempt and it is not allowed to make similar investments.
Many independent analyses have concluded Georgia public sector pensions are better funded at a higher percentage than most other states but Georgia does have a liability position and it needs to close the gap between funds available and owed over time. Georgia is not breaking new ground; it is adopting an investment strategy already authorized in every other state.
Additional resources: Senate Bill 402. ERS 2011 Audit.
Tax Reform
The results here were mixed and tax reform requires more work.
Pro-business and economic development changes adopted this year include the elimination of sales tax charged on energy used in manufacturing, agricultural tax relief, reduction of the sales tax paid on jet fuel purchases (to help all commercial airlines) and some other modernization of the tax code. Pro-family changes that will prove to be politically popular include reduction of the marriage penalty on state income taxes and a guarantee that the first $65,000 of income earned by retirees (plus Social Security) will be continue to be exempt from state income taxes.
The motor vehicle revenue structure will change. The state will charge a title fee rather than state and local sales tax on new car purchases after March 1, 2013; essentially, that is a wash. But the state will no longer impose the much hated annual ad valorem value tax on vehicles purchased starting in March next year. The state will continue to impose ad valorem tax on millions of existing vehicles so in practicality, it will take years to fully convert this system.
For the second straight year the Legislature took no action to reduce state personal income tax rates that peak at 6 percent, which are among the highest rates in the southeast. Tax reform also did not address possible state sales tax rate or corporate income tax rate questions. House Speaker David Ralston has said personal income tax rate reform should be a priority.
Additional Resources: House Bill 386.
Health Care Reform
Not much happened in the General Assembly because Georgia is waiting for an early summer U.S. Supreme Court decision in the Patient Protection and Affordable Care Act case.
Georgia is among 26 plaintiff states that are asking the Supreme Court to throw out the law. Nine justices have the option to keep the law as is, throw it out entirely or select bits and pieces to uphold or reject, including the contentious individual mandate. Health care dominoes will begin to fall into a more predictable pattern after the opinion which is expected in late June.
This issue affects every Georgian, whether you work for or own a business, purchase your own health insurance, use public sector programs or have decided you do not want insurance. You could be forced to obtain insurance whether you want it or not, and larger numbers of your tax dollars could be required to support public sector insurance programs.
For example, existing health care law would expand the number of Medicaid eligible Georgians by 650,000 to 750,000 within two years. The anticipated cost to the state in new dollars would be $2.5 billion over ten years, paid for somehow by someone, most likely taxpayers. If upheld, the law would also force Georgia to create a health insurance exchange that it currently does not have, or to accept one that is created and overseen by the federal government.
Several pieces of Georgia legislation were introduced this year that could become the basis for a state-based health care solution if the federal law or portions of it are ruled unconstitutional. None of this year’s Georgia bills passed the General Assembly but they could be resurrected as a package or individually next year. How all this plays out depends on how the Supreme Court feels about the greatest expansion of the federal government into health care since Medicare.
Additional Resources: GPPF analysis of U.S. health care spending. GPPF commentary on state health exchanges.
Save the Date: Monday January 14, 2013 for the next Georgia General Assembly!
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Senate Passes Criminal Justice Reform 51-0 with Amendments
Mike Klein
Georgia criminal justice reform has passed both chambers but the House would need to agree to substitute legislation because the Senate added seven amendments when it passed the bill 51-0 on Tuesday afternoon. Two other floor amendments failed and two were withdrawn.
None of the amendments dramatically change Georgia’s most sweeping criminal justice reform since a generation of do the crime, do the time laws were passed some twenty years ago.
Governor Nathan Deal made criminal justice reform a major priority during his first State of the State address in January 2011. The work of the Special Council on Criminal Justice Reform last year and the legislature this year are an important first step forward with others to follow.
The satisfaction that was evident because of these reforms is somewhat tempered because the fate of a juvenile justice code rewrite is less certain. Some sources who are familiar with the HB 641 juvenile code rewrite said Tuesday that the bill is dead this year because it still requires more financial analysis of the impact that would be made by proposed changes.
So for the moment the spotlight shines on adult criminal justice system reforms.
Monday afternoon Sen. Bill Hamrick outlined changes to burglary, forgery and other sections when he presented House Bill 1176 to the Senate. Hamrick is co-chair of the Special Joint Committee on Criminal Justice Reform. One amendment would reduce the number of felony burglary levels from three in the House version to two in the Senate version.
Senator Bill Hamrick
“After discussion with prosecutors we believe it was a little too complicated and so we’ve narrowed it to two,” Hamrick said about the burglary section. Residential burglary would become a first degree felony and all other burglaries would become second degree felonies. The House and the Special Council on Criminal Justice Reform both said that burglary of an occupied home should be treated different from burglary of unoccupied sheds or buildings.
The Senate version would also change the forgery statute. “Checks are the most common type of forgery,” Hamrick said. Felony check forgery would be established at $1,500 and above, or possession of ten or more blank checks that were intended to be passed as forged checks. Forgery of checks valued at less than $1,500 would be prosecuted as misdemeanor offenses.
Other changes would assist counties with drug court funding, assist state courts if their case loads grow due to other criminal justice reforms, make sure misdemeanor crimes are counted when a person’s recidivism record is being reviewed and strengthen the state’s prosecution language for persons who are charged with trafficking a person for sexual purposes.
There was bipartisan enthusiasm for reform on the Senate floor. “It is my hope that not only can we pass this unanimously but also look toward some of the remaining issues that in the future may need to be addressed,” said Democratic Sen. Emanuel Jones. Gov. Deal has kept the Special Council on Criminal Justice Reform intact and its work is expected to continue this year.
The intent of this two-year reform initiative is to slow down the anticipated growth inside Georgia prisons by emphasizing alternatives to incarceration for non-violent property crime offenders and personal drug abusers who would benefit more from intense treatment programs.
Twenty years ago Georgia had a $500 million state prisons budget and about 30,000 inmates. A generation of popular do the crime, do the time laws exploded the prison population. Today the state has 56,000 inmates and a $1.1 billion prison budget plus several hundred million dollars more for parole and probation. Georgia faced having 60,000 inmates plus $264 million in additional new cost within four years if the state did nothing about criminal justice reform.
Another section in the new law would change public access to records kept on persons who are charged but never prosecuted or charged but never convicted. The charge — regardless of the outcome — often makes it difficult and sometimes impossible to find employment, which is one of the two key factors in rehabilitation. The other is available secure housing.
Hamrick noted people who have an arrest but no conviction “deal with that on their record for the rest of their life, basically. We have some provisions in the bill that would allow for those records to be restricted when a person is applying for a job but not restricted to the extent that law enforcement or judicial officials would not get that information.”
The House and Senate are not in session Wednesday. House consideration of the Senate amendments will become an agenda for the 40th and final day on Thursday.
Georgia Legislature Passes FY 2013 Budget by Wide Margins
Mike Klein
Georgia legislators overwhelmingly approved next year’s budget early Tuesday afternoon, just one day after they voted to pass significant pension investment reform.
Next year’s $19.342 billion budget that passed both chambers Tuesday is 5 percent higher than $18.2 billion current fiscal year funding. Governor Nathan Deal’s office recently increased the revenue estimate by $177 million. “While this is positive affirmation that we are recovering slowly, it should be understood that this growth does not begin to regain all the lost ground from our high water mark in Fiscal 2008,” said House appropriations chair Terry England.
“At that point (during fiscal year 2008) our budget was some $2 billion larger than it is today with a half million less people. In fact, the fiscal year 2013 base budget proposes state operations at 20 percent lower per capita than one decade ago,” England said.
The fiscal year begins July 1. The new budget has a strong economic development focus with $44 million in new One Georgia Authority funds and $67 million for REBA – Regional Economic Business Assistance – primarily from Georgia’s receipts from the national mortgage settlement.
Senate appropriations chair Jack Hill told the chamber those funds will “front-load our economic development efforts. If we have the opportunity to bring in new industry nothing will stop us from the standpoint of a new rail spur or a new road, whatever is needed for that community and the state to bring new jobs to Georgia.”
The House voted 143 – 24 and the Senate voted 45 – 0. The bill contains no across-the-board state employee salary increases, except for some increases for Georgia Bureau of Investigation agents and Department of Natural Resources rangers. The bill fully funds pre-K salaries and operating expenses for 170 days; there was concern earlier in the session that pre-K teacher salaries were addressed but operating expenses were overlooked.
Significant public sector pension reform was approved on Monday when the House passed SB 402 by a 104 – 53 margin. The bill allows for the allocation of up to 5 percent of Employee Retirement System assets into alternative investments such as venture capital funds. The state Teachers Retirement System is exempt. The bill does not require any specific alternative investment; it merely establishes the framework and defines the investments.
The budget that will be sent by Governor Deal would restore funding to the Morehouse and Mercer University Schools of Medicine. It would also expand new physician residency slots statewide, restore $4.3 million for substance abuse programs, add $1.2 million for GBI scientists who conduct drug tests and fund new judges in the Bell-Forsyth and Piedmont judicial circuits. Ten million dollars is provided to fund accountability courts as part of criminal justice reform.
Other highlights include funds to open a new trade office in China; $108 million in bonds for the Technical College System, $75 million for reservoir development, and $29.8 million to comply with the federal court agreement on behavioral health programs. Autism treatment funds would be allocated for the Marcus Center, Emory University and a facility in Savannah.
The Plains and Sylvania welcome centers would remain open. The budget also restores funds that were in jeopardy for cooperative extension county offices and 4-H programs.
Click here to read the budget legislation tracking sheet.
Click here to read the final budget legislation.
Click here to read the pension reform bill.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Georgia House Passes Digital Learning Bill, 125 – 38
Mike Klein
Georgia’s current sixth graders will start high school with more digital learning options. Monday the House passed Senate legislation to expand those resources and prohibit local systems from blocking students who want to take online courses. The bill passed 125 – 38. Georgia Virtual School would manage the expansion and emerge with a more ambitious footprint. Having already passed the Senate, the legislation is ready for Governor Nathan Deal’s consideration.
Senate Bill 289 stipulates that expanded digital learning options in high schools would start to become available in the fall 2014 school year. Rep. Mike Dudgeon presented the legislation on the floor, saying, “When this bill is fully implemented in 2018 I think we will look back and say this bill is really not that big of a deal because we will have moved so far in technology.”
This session lawmakers also passed House Bill 175 to establish a clearinghouse of online courses that would be available to students statewide. Georgia Virtual School would select the courses from public school systems, or from charter schools that nominate their courses.
Senate Bill 289 directs the state Board of Education to “maximize the number of students” who could participate in digital learning. The initial Senate version by Majority Leader Chip Rogers sought to mandate that each high school student take at least one online course before graduation. “Mandate” was replaced with “maximize” before Senate passage.
Rep. Mike Dudgeon
“We are setting policy about how we want education to move in the big picture,” Dudgeon told the House. “This is not a mandate. This is telling the state board to set policies to maximize these opportunities across the state.” Rogers and Dudgeon have both said Georgia Virtual School could serve 100,000 students per year. Currently, GAVS has 10,000 students taking regular online curriculum. It also offers credit recovery courses.
Highlights from Senate Bill 289: Make digital learning available to more high school students statewide through GAVS; prohibit local school systems from blocking participation by students who want to select digital learning courses; and, change the funding formula so GAVS and the local school share the $650 total reimbursement when students choose a GAVS course.
The reimbursement question is an important point. Currently, local schools lose all $650 when a student chooses a GAVS course over one offered inside the traditional classroom. This has been a strong incentive for local schools to deny students when they request permission to take a Georgia Virtual course. Under the new formula GAVS would receive up to $250 to cover its costs while the local school would receive up to $400 maximum.
The legislation further stipulates that the state shall make end-of-course tests available online by the 2015 – 2016 school year. This is a forceful response to test cheating scandals in Atlanta Public Schools and other school systems. “It certainly prevents the adults from cheating,” Dudgeon said, because scores would be recorded in state computers and local school personnel would not evaluate or have the ability to change end-of-course test answers.
Dudgeon also noted, “We know there are financial issues. Some districts may not have the money or the technology. One goal of the (schools funding) finance commission next year is going to be to allow more money to be pointed toward technology.” Click here to read an earlier article about this legislation.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
History Up Close at U.S. Supreme Court Health Care Arguments
Mike Klein
Monday morning millions will pay attention via media reports but only a few dozen will be inside when the U.S. Supreme Court begins three days of hearings that will decide the constitutionality of President Barack Obama’s federal health care reform law. Georgia Attorney General Sam Olens will be among those few who have a seat in the Court where history will begin to unfold.
“We won’t know the opinion until the end of June,” Attorney General Olens said this week when he discussed the case before Georgia Public Policy Foundation members and guests. The lawsuit that reached the U.S. Supreme Court is just one of several filed nationally that all had the same goal: Throw out the Patient Protection and Affordable Care Act and start over.
Georgia is among 26 plaintiff states that are challenging the law before the Supreme Court. U.S. District Court Judge Roger Vinson ruled the individual mandate unconstitutional in his January 2011 decision. Vinson further ruled that the mandate is the essential component of the entire law and, therefore, he declared the entire law unconstitutional.
The federal government appealed to the 11th Circuit Court of Appeals in Atlanta. Last August the appellate court upheld Judge Vinson’s individual mandate decision by a 2-1 margin but the three-judge panel also ruled that the mandate could be severed from the entire Act, so the remainder of the law could stand. “We didn’t like that part of the ruling,” Olens said.
That is a very condensed version of how this case got to the Supreme Court. As the Attorney General outlined, six hours of arguments over three days will be conducted as follows: Monday the Court will consider whether legal challenges are premature or whether challenges must wait until after the law takes full effect in January 2014. Individual mandates will be argued Tuesday and Medicaid expansion Wednesday.
Georgia Attorney General Sam Olens
Olens explained the question-at-hand for Monday. “The issue is simply that you cannot file a lawsuit on the imposition of a tax before the tax is collected,” the Attorney General said. “Since the tax, or penalty, is not collected, until January 2014 the theory goes this case has been prematurely brought and you would have to re-file it after January 2014.”
The individual mandate section to be argued Tuesday has generated the most headlines since the Obama administration began to pursue health care reform legislation. It would require that every adult American – “with minimal exceptions,” Olens said — must obtain health insurance or pay a penalty to the federal government starting in 2014.
This raises the question: can the federal government force citizens to purchase any product, and if they choose to not purchase the product, can the government then impose a fine? The U.S. District Court in Florida and the Appellate Court in Atlanta both said no. Other courts have issued different rulings, causing confusion and requiring a Supreme Court final decision.
Medicaid expansion under this law – without federal funds to support the expansion – is the Wednesday discussion. Olens said Georgia’s Medicaid-eligible population could swell by 650,000 to 750,000. The reason is the bill establishes Medicaid eligibility at 133 percent of the federal poverty level starting in 2014. Medicaid is a shared federal – state partnership but states increasingly are being forced to absorb expanded costs even before this new law takes effect.
“We already know that (fewer) doctors will accept Medicaid,” Olens said. “What happens when we have a 35 percent increase in the number of Georgians that are then on Medicaid? It is an additional $2.5 billion cost (to Georgia) over the decade.”
Attorney General Olens also said the federal health care law will require large employers that include state governments to offer a minimum level of benefits, as decided by the federal government. “They are telling us what coverage we need to provide to state employees,” Olens said. “That ought to be your decision, not the federal government’s decision.”
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Huge Approval Votes for Tax and Criminal Justice Reform Bills
Mike Klein
Georgia General Assembly sessions usually move at NASCAR speed into the final few days but some of the highest profile pieces are finished before next week’s final three days.
Thursday afternoon the Senate unanimously approved tax reform and the House passed criminal justice reform. The tax bill is ready for Governor Nathan Deal’s signature. The Senate must still debate and vote on criminal justice and that is expected on Monday.
The Senate approved tax reform 54-0. The House approved criminal justice reform 164-1 but the single no vote was later changed to yes. Tax reform is one of two big dominoes that fell this week. Monday afternoon the Senate passed the controversial charter schools constitutional amendment resolution with a more than 40-vote two-thirds majority supplied by all 36 Republicans joined by four Democrats.
Thursday afternoon’s tax and criminal justice floor debate in both legislative chambers could best be described as courteous and gentle. There was nothing rancorous heard in either chamber. A few soft blows were landed but there never was any doubt that both bills were headed toward huge approval votes.
Supporters describe tax reform legislation as pro-business and pro-family. It creates a sales tax exemption on energy used in manufacturing. Other tax changes would replace vehicle sales and the annual ad valorem taxes with a one-time only title fee; provide some tax relief to agriculture, reduce sales tax paid on jet fuel sales by one-fourth; and, modernize the tax code for small businesses.
Tax schedules would change to ensure that married couples are not penalized by filing a joint return instead of filing individually. Retirees will continue to be allowed to exempt their first $65,000 in earnings from state income tax; the exemption level was scheduled to increase but now it will be frozen. School supplies sales tax holidays were reinstated for this year and next year. And, the state would begin to require the collection of sales tax on most internet sales.
Click here to read tax reform analysis published today by the Georgia Public Policy Foundation President Kelly McCutchen.
Criminal justice reform is intended to save the state some $264 million over the next four years by emphasizing alternative treatment programs to incarceration for non-violent offenders. Reforms emphasize alternatives to incarceration for non-violent offenders who are not considered a threat to public safety. Simple possession drug users could be eligible for treatment programs but the legislation makes a distinction between users and drug traffickers. Drug and mental health courts are big components of the new model, relying public and private community programs to provide treatment.
Click here and here to learn more about Georgia criminal justice reforms.
The General Assembly is not in session on Friday and no committee meetings are scheduled. Floor sessions will be held Monday and Tuesday. There will be no floor session Wednesday. The 40th and final day is scheduled next Thursday.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Second Version of Georgia Criminal Justice Reform Is Better Law
Mike Klein
The second version of criminal justice reform legislation is better than its earlier cousin because of what the bill does not include – hundreds of lines of rules and regulations about how to run the state probation and parole programs.
The absence of a legislative mandate means there would be more flexibility to expand programs that work and jettison those that are found to be wanting. One example is electronic monitoring which is being successfully developed inside the state parole program.
The House was expected to debate and approve the criminal justice reform substitute bill today. It would firmly commit Georgia to incarceration alternatives for non-violent offenders, especially mental health and drug court treatment options.
The state would continue to lock up violent criminals for as long as they deserve. State corrections personnel would also work with local law enforcement agencies to further alleviate local jail overcrowding. That was an early local concern about the bill.
The original version introduced a couple weeks ago included 17 pages and nearly 600 lines of rules and regulations about such things as community service as a condition of probation, penalties for probation violations, parole supervision, records requirements, how to integrate parolees back into society, new hearings for parole violators and quite a bit more. Those sections are gone and we are told the decision was to address those issues administratively.
The legislation includes revisions that are consistent with 2010 Special Council on Criminal Justice Reform recommendations, and that is the best measure of whether this is a good bill. The Council was asked to address the growth of the state’s prison population, improve public safety by reducing crime and recidivism and hold offenders accountable by strengthening community-based supervision, sanctions and services.
There is a significant emphasis on non-violent property crimes and simple possession of drugs. Those two categories account for more than half of all state prison admissions and they are a primary reason that state corrections system costs have grown from $500 million annually 20 years ago to $1.1 billion annually now.
The bill would establish three burglary categories with a distinction between the burglary of a residence or an unoccupied structure. Several penalty levels are built into the bill based on contributing factors such as whether the burglar was armed or a residence was occupied at the time of the crime. The substitute legislation removed a distinction about burglaries committed after sunset and before sunrise because it was considered vague.
Georgia theft statutes have not been updated in about 30 years. The bill would raise the felony theft threshold from $500 to $1,500 – a similar change has been made by many states during criminal justice reforms. The felony shoplifting threshold would increase modestly from $300 to $500. Retail criminals who routinely stay below the felony shoplifting level will be dismayed by new language that would aggregate the value of their thefts. The value of property stolen over a 180-day period could be aggregated to reach the felony level.
The expansion of weight-based drug sentencing would phase in over two years starting in July 2013 to give the Georgia Bureau of Investigation time to improve its capabilities. The new bill would also adjust some sentences. For instance, conviction for possession of an illegal substance that weighs less than two grams would carry a three-year maximum sentence; the original bill specified a five-year maximum sentence. Similar minor modifications would be made to other sentences.
The Special Council made no child abuse law recommendations. The revised bill includes language that would require mandatory reporting of suspected child abuse by “reproductive health care facility or pregnancy resource center personnel and volunteers.” This would include employees of facilities that perform abortions when there is suspicion about the cause of pregnancy.
No doubt there is significant cost associated with the implementation of these and other recommendations. Some of it is being handled inside the state budget, for instance, more beds outside prison for non-violent offenders. Other ideas are included. The bill proposes that offenders who are accepted into mental health curt treatment programs could be charged a $1,000 participation fee with an option that the fee could be waived or collected monthly. The fee would help cover costs to administer the programs, many of which would not be state-funded programs.
House approval would move the bill to the Senate for a vote expected next week.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
House Sends Tax Reform Bill to Senate on 155 – 9 Victory Lap
Mike Klein
The Georgia House overwhelmingly approved tax reform legislation Tuesday afternoon, sending the bill to the Senate on the wings of a powerful 155 – 9 bipartisan victory lap. Speaker David Ralston closed debate with a rare appearance in the well, telling members to, “Vote Green!”
Ralston personally thanked A.D. Frazier, chairman of the 2010 Special Council on Tax Reform that traveled the state and took testimony from hundreds of Georgians before it submitted a far-reaching … and some would say, politically challenging … set of recommendations.
“Some of you who followed that Council know that even though he was one of my appointees, I really couldn’t do much with him!” Ralston told House members. “He led what I believe is an effort that will continue to pay dividends in this state for many, many decades to come.”
House floor debate – scheduled to last three hours – was considerably shorter and entirely positive when it began in mid-afternoon. Rep. Mickey Channell, chair of the special legislative committee on tax reform, began the debate by acknowledging “the completion of a fairly long journey” but he soon added, “HB 386 is not a comprehensive tax reform package.”
House Speaker David Ralston
Using phrases like “one more tool in that tool box” to attract new businesses, Channell and other speakers returned often to the impact on jobs. He said eliminating sales taxes paid on energy used in manufacturing was a reason Caterpillar will locate a plant that employs 1,400 near Athens. Channell said a sales tax exemption for projects of regional significance is an “important deal closer for our state” and “another matter that will help create jobs for the state.”
One by one other speakers including Minority Leader Stacey Abrams went to the well to support House Bill 386, which was immediately transmitted to the Senate. The legislation combines new revenues and tax changes that Channell described as pro-business and pro-family.
On the taxes side, the annual ad valorem tax paid on vehicles would be gone, and sales tax paid on vehicle purchases would also be gone, both replaced by a one-time only title fee paid at the time of purchase, whether through a dealer or in so-called casual sales between individuals.
The marriage penalty that results in married couples paying more than single individuals would be gone under the legislation. Tax-free retirement income would be capped at $65,000; it had been scheduled to increase annually but that will not happen. Channell said even at the current cap, Georgia loses some $700 million per year in tax revenue.
A. D. Frazier, Chairman, Special Council on Tax Reform
Other tax changes include reinstating the sales tax holiday for school supplies for two years starting this fall, elimination of a film production sales tax exemption because it did not work, new sales tax exemptions for agriculture, and a reduction in state sales tax charged on jet fuel sales.
The legislation also requires that all online retailers with Georgia customers must collect and remit sales tax. The tax will not generate a great deal of revenue but supporters say it will create a more stable playing field for the state’s brick and mortar retailers.
Soon after the House voted, Georgia Chamber of Commerce President and CEO Chris Clark said the legislation would “attract new investment, encourage job creation, provide support to existing businesses and approve our overall competitiveness.”
Click here for coverage of Tuesday morning’s special committee on tax reform hearing.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Tax Reform Bill Passes Out of Committee; Heads to House Floor Debate
Mike Klein
Georgia online shoppers could begin to notice changes in their internet purchase sales taxes three months sooner than originally announced. The new effective date would be October 1 – just in time for holiday shopping – rather than on New Year’s Day which was the original date.
The announcement was made Tuesday morning during the second and possible final meeting of the House – Senate revenue committee that oversees tax reform. House Bill 386 passed out of committee on a voice vote after a 13-minute hearing and no witnesses. The bill moves to the House for debate and a possible vote today. The track is fast; the bill was introduced Monday.
A 1992 U.S. Supreme Court ruling exempts retailers from having to collect and pay sales taxes in states where they have no physical presence – known as nexus. States have looked for an internet sales tax option since the ruling and especially since the Recession dwindled revenues.
New York in 2008 was the first state to expand the definition of “nexus” to include affiliates doing business on behalf of an internet retailer. Rhode Island followed suit in 2009. Sales taxes paid by out-of-state online retailers are often referred to as Amazon taxes because of Amazon.Com, the behemoth online shopping site.
Amazon and North Carolina went to war after the state imposed passed a 2009 law similar to those in New York and Rhode Island. The online publication TechJournal reported North Carolina claimed Amazon or its customers owed $50 million in unpaid sales taxes dating back to 2003. Amazon discharged all of its affiliates, which harmed those businesses. TechJournal said there also has been a negative impact on start-up businesses.
Rather than fight with each other, last year Virginia reached an agreement with Amazon. The company agreed to collect sales taxes just like any physical retailer. The company also said it would open two fulfillment centers in Virginia, investing $135 million and creating 1,350 jobs.
The Tax Foundation position is that the so-called Amazon tax is unconstitutional. It described the New York Law as “an unprecedented expansion of state taxing authority.” It said exposure to these kinds of taxes would make it less likely for businesses to expand into those states.
Georgians are already required by law to monitor the sales tax they would owe by making online purchases from out-of-state retailers. And in theory, they are supposed to pay tax to the state. The fiscal note attached to HR 386 admitted, “In practice, these use taxes are seldom paid.”
Estimated e-sales tax revenue would be small by government budget standards — $52.2 million for the state and $36.4 million for local governments – spread over fiscal years 2013 — 2015. During the same period the fiscal note estimated that the state would lose $81.1 million and local governments would lose $56.8 million because of sales tax holidays for school supplies.
During Tuesday morning’s hearing Sen. Steve Henson asked House Majority Leader Larry O’Neal “why it took us so long to get here … really, why the last five days or so we’ve got a major tax bill for us to try to evaluate and do the best for Georgians.”
“There’s not one silver bullet as to why,” O’Neal said. “I will assure you it’s not intentional to be done in any way to be deceptive to anybody or to hurry it by anybody for any reason. If it were, it would be all new propositions.” He added, “It’s finally time now to not let perfect get in the way of real, real good. That’s why we’re dealing with it now, in my opinion.”
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Democrats Hooks, Thompson Led Charter Bill Across Senate Finish Line
Mike Klein
Senate Democrats intent on defeating a charter schools constitutional amendment vilified the legislation Monday afternoon. Then four of their own including the Senate’s two longest serving members crossed the charter schools political divide to assure that Georgia voters will decide whether the state shall be allowed to approve charter schools when they vote in November.
George Hooks of Americus and Steve Thompson of Marietta have been in the Senate since 1991. They came to Atlanta as House freshmen ten years earlier. Together they have walked those State Capitol corridors and heard thousands of speeches for some 60 combined years.
Monday afternoon Hooks and Thompson helped provide the difference in a charter schools bill vote that one day might be considered historic. With 38 votes needed for two-thirds passage, Hooks and Thompson voted with the Republican majority. They provided forceful political cover on a contentious issue. The final vote was 40-to-16 with four Democrats in support.
Senator George Hooks
For Hooks, it was a personal decision. The Sumter County schools that he attended as a youth and where his daughter now teaches first grade are in chaos and might lose their accreditation. Proclaiming that “My local people come first,” Hooks launched into a powerful oratory:
“I’m going to tell you one of the most heart-breaking things I have ever been through in my life was meeting with 128 mamas to talk about their children, black and white, rich and poor, young and old. They are on the verge of catastrophe. They have no faith, no confidence in our local school board,” Hooks told the quiet Senate. “Maybe they are wrong but that’s the fact.
“If somebody has the power to take over that dysfunctional school board I will not stand in their way,” Hooks vowed. “What they want is a state-chartered school system. I am not going to face a tear-stained mama fighting to protect her child again.” Shortly thereafter he concluded, “God bless each of you. Vote your personal conscience.”
Thompson listened as three other Democrats spoke against the bill. Sen. Vincent Fort called the legislation a “blatant corruption of power” that “trotted out” school children as “pawns to pad the pockets of for-profit management companies and real estate deals” supported by a “Herculean” lobbying effort that, Fort told the Senate, was “drenched in money mongering.”
Then Thompson – who once served as the Democratic majority floor leader – rose in defense of the bill. “I went through one session when the public thought they didn’t get a chance to vote. I don’t want to do that again because in the final analysis what some of you folks are forgetting is (Georgians) get to vote on this and debate it all summer and if they don’t like it they can make it go away,” Thompson said.
Senator Steve Thompson
“The other argument I hear that doesn’t make any sense (is) you don’t need to do this, you don’t have to do it. Well, if you didn’t do it this way the public wouldn’t get to have their voices heard and vote on it. Think of that. I’m always going to be for public education.”
Thompson said he was assured by Governor Nathan Deal “that he is going to make it a priority that rural schools are not hurt and that some of these innovations will take effect in rural areas … I am not going to be accused of tying the hands of this administration when it wants to try innovation, or this General Assembly. That’s where I’m at. I’m going to embrace it because if you get afraid to change you become dust sitting in a car somewhere in a town where tumbleweed is rolling by you.”
All 36 Republicans voted yes. Hooks and Thompson were joined by Democrats Hardie Davis and Curt Thompson. Democrats who worked against passage also offered two amendments that were both defeated. One amendment would have rewritten the ballot question. The other tried to ban for-profit education companies from doing business in Georgia.
Georgia Charter Schools Association CEO Tony Roberts singled out Governor Deal for his support since the unexpected Supreme Court opinion last May that declared the Georgia Charter Schools Commission unconstitutional. The Governor approved several million dollars this year and next fall to make sure former charter commission schools will remain open. He also named the constitutional amendment as one of his highest legislative priorities.
Asked about November, Roberts said, “The next strategy is how to keep the message ringing clear and true about what this will do. There is going to be a lot of competing noise (around) the Presidential election.” The ballot referendum needs a simple majority for November passage, a lower bar than the hurdle it just passed in the House and Senate.
“We’re tickled to death,” Roberts said.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
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