Medicaid Dominated when Governor’s Policy Advisors Took Questions
Mike Klein
Medicaid is a beast. About one-in-five Georgians receives Medicaid health care. That is 1.7 million people. Fifty-nine percent of statewide births are Medicaid babies. Another couple hundred thousand children are enrolled in PeachCare, the state children’s health insurance program. Medicaid could grow by hundreds of thousands more if the U.S. Supreme Court upholds the federal health care reform law in its decision expected next month.
Not at all surprisingly, Medicaid redesign questions were abundant when three of Governor Nathan Deal’s advisors met with Georgia Children’s Advocacy Network members at the Freight Depot in Atlanta. The advisors made no presentations and took questions for 90 minutes.
Health policy advisor Katie Rogers named telehealth reimbursement policies, portable electronic records, better outcomes for vulnerable children, physician shortages in some specialties, how to manage health care in counties that are medically underserved and treatment options for chronic childhood illnesses as part of the wide-ranging Medicaid redesign conversation.
Next month the U.S. Supreme Court will rule on constitutionality of the 2010 federal health care reform law. If upheld the Patient Protection and Affordable Care Act provisions often known as ObamaCare could add 620,000 new Medicaid patients to the state program. Rogers predicted, “People who haven’t had access to services are going to seek services probably very quickly.”
Georgia Medicaid cost $7.78 billion in fiscal year 2010, according to Kaiser State Health Facts. Federal funds pay 66% and the state is responsible for the rest, about $2.7 billion. Georgia Medicaid program redesign is being managed by the Department of Community Health with private partner assistance from Navigant. The project is described in a comprehensive design strategy report available on the DCH Medicaid website.
This project is so important to Georgia’s health care community that it is being closely monitored by many organizations outside government. Cindy Zeldin is executive director at Georgians for a Healthy Future which advocates for improved statewide access to quality health care.
“The three buckets when we look at improving Medicaid would be one, just coverage, getting kids who are eligible but who are not enrolled today into the program so they at least have that front door access,” Zeldin told the Public Policy Foundation this week.
“Second, improving access to care, just making sure there is a mechanism to make sure that being in Medicaid means you can see a provider if you need to,” Zeldin said. For instance, the state has no OB-GYN practitioners in 39 counties, which is an impediment to women’s health.
“Third would be improving outcomes and accountability, what you are asking managed care companies to report on and making sure you are measuring outcomes that ensure quality care.”
The Supreme Court opinion expected next month will also decide whether Georgia must create a health insurance exchange. Last December a state report to Governor Deal said a private or quasi-governmental exchange would be preferable to one imposed by the federal government, but Georgia would prefer that it is not required to create any exchange. Georgia opposes the federal health care reform law and it joined the suit that challenges the constitutionality.
“If the law is upheld as it stands now we will work very quickly to implement a state exchange,” Rogers said. “If the law is not upheld the discussion will begin again on whether or not to move forward with a state exchange. Part of the concern is without the individual mandate would people want to buy insurance through the exchange?”
Education and Public Safety Issues
Education and several public safety issues were also discussed during the open forum.
Education policy advisor Kristin Bernhard said several early childhood education programs lead the priority list heading into next year’s General Assembly. Do not expect support for private school vouchers or increasing the age for compulsory school attendance from 16 to 18.
“The voucher conversation isn’t on the table for us,” Bernhard said. “We’re more interested in increasing the quality of public education for all students everywhere.” On compulsory school attendance she said, “The evidence is not necessarily compelling that raising the age of mandatory school attendance automatically results in an increased graduation rate.”
Education headlines over the next year will include incorporating the state’s version of new national core curriculum coursework, dual enrollment for middle school students taking high school courses or high school students taking college courses, tenth grade college readiness testing, and preparation to expand career pathways education now scheduled for fall 2013.
Also, Georgia admits that it has too many high school graduates who require remedial courses when they enter college. “We know that students are graduating from high school not ready for college,” Bernhard told 100 Georgia Child Advocacy Network members. Part of this discussion is how these students can be assisted by resources inside the state technical college system.
This week the Illinois Senate President proposed his state enact internet gaming legislation to get in front of a potential federal law that would grandfather existing state programs but prevent other states from creating new ones. Do not expect anything like that in Georgia.
It is well documented that the lottery-funded HOPE scholarship, grant and pre-K programs can no longer afford to fully fund their commitments. Governor Deal opposes a proposed casino-style project and Bernhard says, “What we’re looking at is what we can do to boost the existing revenue streams.”
Several folks applauded when public safety advisor Thomas Worthy said, “I have no doubt that we will probably see and definitely sign a juvenile code rewrite next year.” HB 641 was a substantial effort to rewrite piecemeal juvenile laws that are decades old. It passed the House but then was stopped before Senate consideration so more work could be done on cost.
“Everybody is in agreement on the policy side of things,” Worthy said. “We are there. The stakeholders are there. Agencies are now there. Now what we are tasked with doing is figuring out a way to not only pay for implementation but actually ascertain savings that will come under the bill.” Worthy said consultation has begun with the Pew Center on the States; Pew assisted with criminal justice reform legislation that Governor Deal signed this month.
Worthy also acknowledged, “Not only do we have a horrible child trafficking problem within our state, (Interstate) 75 is used to move folks going to other states.” This year HR 1151 in the General Assembly created a commission to study child trafficking and make recommendations.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Does School Choice Financially Impact School Districts?
Mike Klein
This summer and fall you will repeatedly hear that approving a charter schools constitutional amendment would steal resources from traditional Georgia public schools. The idea is that when any money follows a student to a charter school the students left behind somehow suffer.
This argument seems to apply only when students move to charter schools. You never hear public school systems, their superintendents or school board members complain when students move from one public school system to another. Apparently financial harm is a one-way street.
The premise that students moving to charter schools will cause financial quakes in traditional school systems also suggests we should accept another premise that public school systems are so inflexible they cannot adjust their fixed and variable costs and still produce quality learning.
For instance, is teacher employment a fixed or variable cost? It is a fixed cost if you believe the school district cannot or will not adjust how many instructors it needs based on enrollment. It is a variable cost if you believe teachers should increase or decrease based on enrollment.
A new report released nationally by the Friedman Foundation for Educational Choice challenges the concept that public school costs are so fixed that they cannot be adjusted up or down. “The Fiscal Effects of School Choice Programs on Public School Districts” breaks down fixed and variable costs for an average public school system in all 50 states and the District of Columbia.
Dr. Benjamin Scafidi
“If it is true that virtually all costs are fixed then when public schools add students they shouldn’t get extra money because their costs are fixed,” said author Benjamin Scafidi, who is director of the Economics of Education Policy Center at Georgia College & State University.
“I’ve never heard a public school leader say that their costs don’t go up when they add students so they can’t have it both ways, logically. Before this report they did have it both ways.”
Scafidi used 2008-09 federal data from every state to analyze short-run fixed and variable costs. The report lists capital expenditures, interest, administration, operations, maintenance and transportation among short-run fixed costs. Instruction, instructional support, other student support, enterprise operations and food service were placed in the variable cost category.
“The proper way to think about this issue is not whether public school districts have in the past reduced costs when students in large numbers left the district for any reason,” the report says. “The issue is whether they are able to do so.” Any reason is not limited to school choice. It can include economic downturns, such as a major employer moving away from the region.
Scafidi concluded almost two-thirds of public school expense is variable that districts should be able to adjust based on enrollment. In Georgia, he found $11,468 average per pupil cost is almost two-thirds variable ($7,507) and the remainder is fixed ($3,961).
The report asks, “If a significant number of students left a public school district for any reason from one year to the next, is it feasible for the district to reduce the costs of these items commensurate with the decrease in its student population?” Scafidi concluded the answer is, yes, for large and small school districts. He used four Georgia school systems to illustrate.
Atlanta Public Schools reduced teaching staff 6.84% between 2004 and 2010 when the student population declined a similar percentage from 51,315 to 47,944 students. The report notes that the number of administrators increased 19.7% from 395 to 471. This example shows that a large district over time can adjust the variable cost associated with employing teachers.
But can the same be said for a small school district? Wheeler County experienced a 12.1% student population decline between 2004 and 2010 and was able to reduce its teacher staff by 15.6%. Hancock County enrollment dropped 5.3% from 2009 to 2010; the district was flexible enough that it was able to reduce the number of teachers 8.8% and administrators by 18.8%.
“In the first few years of a school choice program in Georgia I think you want to keep the amount of money that follows the child below $7,507 because it is difficult for public schools to reduce their costs more than that when a student leaves,” Scafidi said. “That is the main takeaway.”
The report focuses almost entirely on financial analysis but it does offer this teaching point:
“As public schools lose students via school choice or for any other reason, they have a tremendous opportunity to improve the quality of their schools. When students leave, schools can lay off the least effective teachers. The students who remain would be reallocated to more effective teachers and their academic achievement would increase significantly.”
(The author Dr. Benjamin Scafidi is also former chair of the Georgia Charter Schools Commission and he is a Senior Fellow for Education Policy at the Georgia Public Policy Foundation.)
Fulton Science Academy M.S. Will Try Private School Path
Mike Klein
Fulton Science Academy’s middle school will try to remain open this fall in Alpharetta even after the state board of education denied its state charter application on Thursday. The Academy was already rejected by Fulton County last December so it does not have another public school option.
“Our only viable option right now is to go to a tuition-based private school model which is not our first choice because then it won’t be open to everybody in the public,” board member Angela Lassetter said in a hallway interview just outside the state board meeting room.
Moments earlier Lassetter and two other Fulton Science Academy parents asked board members to wait another month before voting to approve or reject the school’s petition. “Thirty more days isn’t going to change a thing,” said state board member Brian Burdette. Several board members described their concerns about school finances and its governance model. The vote was 10-0 to deny the petition with one abstention.
“We will go forward if there is any possibility as a private institution,” Lassetter said. Parent Nadira Merchant said, “The end? This cannot be the end. The governance of our school, if it needs to be changed (then) change it. You cannot close it down. You cannot deny our children.” Parent James Webb said, “All we’re asking for is fairness and due process.”
Fulton Science Academy Middle School operates in partnership with two sister schools – Fulton Sunshine Academy for elementary pupils and Fulton Science Academy High School. Last year the middle school received a U.S. Department of Education national blue ribbon for academic excellence on standardized tests. So, charter denials by Fulton County and the state board are headlines of note.
Fulton Science Academy applied for a state charter in January just a few weeks after Fulton County denied the school’s petition for a new ten-year charter. Fulton County offered three years but the school insisted on the longer term, a condition that Fulton County board members refused to meet because they wanted more direct oversight over the school’s finances.
Several issues are involved here. First, Fulton Science Academy secured a $19 million bond package and then began to build a school even though it did not have an approved charter beyond June 30, 2012. Second, the Academy began to build its new school without obtaining proper construction site approvals. Third, the Academy did not comply with the Fulton County audit process so the county advised the state that the school was out of compliance with its contract.
State Department of Education staff have worked with Fulton Science Academy personnel on these and other questions since January, but some of the state’s questions were not adequately answered. For instance, records indicate the Academy did not account for what happened with almost $6 million of the $19 million in bond revenue when the state requested that information.
In documents that recommended a denial vote, the state noted, “The governing board has limited autonomy and appears to have little ability to make autonomous and independent decisions.” Fulton County previously noted that Fulton Science Academy personnel served on the boards of other organizations that were doing business with the school.
Thursday morning state board member Mike Royal said Fulton Science Academy financial stability and governance issues “are clearly debatable.” Board member Dan Israel said granting a state charter to Fulton Science could make the state liable for the $19 million bond package. “What is going to be the precedent that we set?” Israel asked. Board member Linda Zechmann noted, “We found no evidence that Fulton County schools did anything improper.”
Fulton Sunshine Academy for elementary students and the high school still have Fulton County local charters for next year but the future for 510 middle school students is hazy. State board members encouraged Fulton Science to address the outstanding issues and submit a new proposal next year.
“To say that it’s okay to close down for a year and (then) rise from the ashes, what are our parents and students supposed to do for that year?” asked Lassetter. “That hasn’t been addressed. It’s unfortunate that’s not been taken into consideration.”
The state board voted on several other charter schools agenda items. Charters were renewed for the Museum School of Avondale Estates and the Northwest Georgia College and Career Academy. Ivy Prep Academy received a new two-year state charter after it was rejected by the Gwinnett County Board of Education. Charter system conversion petitions were approved for the Fulton County and Madison County school systems.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Atlanta’s Reed: What We Need is More STEAM in Our Classrooms
Mike Klein
Atlanta Mayor Kasim Reed thinks our classrooms need more hot air. “We actually need STEAM – science, technology, engineering, arts and math,” Reed told an “Education Nation” audience Monday morning at the Georgia Aquarium. Later he added, “America cannot continue to be what it has been if we continue to have the kind of educational system that we have.”
“Education Nation” is a two-year-old NBC News project to create solutions-based conversations about learning in America. Atlanta is one of five cities being toured this year. Reed was joined onstage by Senator Johnny Isakson and Governor Nathan Deal in a discussion moderated by Meet the Press host David Gregory. WXIA 11Alive is NBC’s “Education Nation” local partner.
Reed visited China in March. “China is rising because of the size of its market.” Reed said. “In a terrific book by Thomas Friedman he talks about the fact that in America if we appropriately educate black people, Latinos and rural kids it is worth about $400 billion a year in expanded economic productivity. We do not have the ability to leave anybody on the side of the road.”
Reed said China is “able to execute faster because they don’t have the robust debate that occurs in the U.S. We also can’t forget in focusing on the success of the Chinese that at the end of the day the creative component we have can’t be lost in our move to make sure we are strong in STEM. We actually need STEAM – science, technology, engineering, arts and math.”
Reed, Isakson and Deal have formed partnerships that were not always possible between the state’s highest elected officials and the mayor of its largest city. Reed has used his Washington connections to lobby hard for approval and federal funds to improve the Savannah ports. He is a frequent visitor to the State Capitol and especially during General Assembly months.
Atlanta Mayor Kasim Reed
Atlanta is the third city on this year’s “Education Nation” tour that opened in Denver last month and visited San Francisco last week. The final stops are Miami later this month and Aspen, Colorado at the end of June. The conference events are customized to local audiences.
NBC’s Gregory noted Georgia has a 9% unemployment rate, employers are seeking specific kinds of workers and there are widespread vacancies because of a skilled workforce shortage.
Governor Deal focused early and often on technology. Last week he visited Westside Middle School in Barrow County. Westside is a Governor’s Innovation Fund grant recipient. Deal saw firsthand the collaboration between Westside and Georgia Tech’s Direct to Discovery program.
“A professor at Georgia Tech was teaching them things that I would never have comprehended that a middle school student would be exposed to,” Deal said. “We are making significant progress to widen the opportunities through technology that are being afforded to our students. I think people are embracing that because they recognize that truly is where the future lies.”
Governor Deal worked the state’s Go Build Georgia initiative that is based on Go Build Alabama into the conversation early. Georgia has a federal grant to help with start-up marketing but there is no direct funding in the 2013 state budget so ongoing costs to run this project will have to be absorbed by the private sector.
Governor Nathan Deal
Senator Johnny Isakson
Go Build Georgia is as an awareness initiative. Once students understand there are many kinds of career options, the education they need is available from many sources, especially the Technical College System of Georgia and programs inside four-year universities such as the Kennesaw State University nursing school.
“The idea is to educate young people and their parents to the fact that if they have a craft, a skill that is going to be employable, they will earn a wage 27 percent higher than the average Georgian currently earns,” the Governor said.
“Education is the solution to the prison system,” Senator Isakson told the audience sprinkled with public education and private sector corporate leaders. “It’s the solution to saving Social Security. It’s the solution to a balanced budget. It’s the solution to more revenue coming into the government. When people are trained and educated and working they’re making money, they’re paying taxes and they’re growing.”
“Thought leaders are beginning to catch up and deal with this problem,” Reed said. “Whoever has the best idea should flat out prevail but we can’t get away from the fact that 84 percent of the kids in the United States of America are educated in public schools … We’re losing a awful lot of kids who are on the sidelines.”
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Who’s the Executive in Charge of Georgia Criminal Justice Reform?
Mike Klein
Governor Nathan Deal signed criminal justice reform legislation Wednesday, triggering the most aggressive rebranding of the state’s approach to criminal perpetrators in several decades. But one question that needs to be resolved is who’s responsible for making sure this all happens?
It sounds like the answer begins with the Special Council on Criminal Justice Reform whose work provided the structure for Georgia’s new law. Governor Deal signed House Bill 1176 during an upbeat signing ceremony just below the north steps at the State Capitol in Atlanta.
Answering my question after the legislation was signed, the Governor said he would extend the Special Council by executive order, something he has previously discussed. “We believe we should maybe expand the scope of those who are involved in this process as we go forward.”
(Click here to watch the signing ceremony on the Georgia Public Policy Foundation YouTube site.)
Criminal justice reform is a massive undertaking that will require integration of several agencies within state government and that’s a first step. It will further cross deep into other public and private sectors such as the courts, local law enforcement and public and private social services. This will take years to integrate and it will require some kind of way to measure outcomes.
Criminal justice reform is neither conservative nor liberal. It does not have a political party. It is widely recognized as essential in Georgia and other states that are re-evaluating how to make certain dangerous people are locked up and non-violent people with substance abuse issues are placed into programs such as courts that emphasize treatment and require accountability.
Georgia spends $1.1 billion per year to lock up some 56,000 inmates. The criminal justice bill jumps to $1.5 billion with parole and probation. The inmate population grows by about 1,000 per year. Supporters believe reforms that emphasize keeping non-violent people out of prisons could slow the growth rate and save Georgia some $264 million over the next five years.
Programs like the drug court in Hall and Dawson Counties are being heralded as the better idea in Georgia, Texas and many other states with similar reforms. The northeast Georgia programs are administered by Superior Judge Jason Deal whose father has a pretty good job in state government. The father has paid attention to his son’s work.
“To listen to the stories, to the lives that have been changed, the families who’ve been reunited, lives that had quite frankly been cast aside by the system that was in place had a tremendous emotional effect on me,” Governor Deal told 100 onlookers. “I’ve not had anyone who has ever attended the graduation ceremony of a drug court come away saying that they don’t believe there is a better way. This is the better way.”
The Governor continued, “I would invite those who are skeptics to have that same experience. Go attend a drug court, a DUI court, a family court, a mental health court. If you come away believing that it’s better to do it by locking people up I truly don’t think you have paid attention to what we are doing now and certainly I think with this legislation, (we are) giving the opportunity to do more and do it better.”
Deal noted that Supreme Court Chief Justice Carol Hunstein and House Judiciary Chair Rep. Wendell Willard have resumed work on juvenile justice reform and Deal suggested the Special Council will be asked to work on that issue. An exhaustive juvenile code rewrite passed the House this year but then the bill was stopped because it did not have a fiscal note.
The Governor closed with a message to the news media. “Many times when we undertake difficult tasks we sometimes feel that the media is our adversary. That has not been the case in this instance,” Deal said. “Your effort educating the public on the importance of this undertaking has had tremendous positive effects. So, thank you. I hope I can say that more often!”
Several Special Council members attended including Supreme Court Chief Justice Carol Hunstein, Georgia State Bar Association President Ken Shigley and Douglas County District Attorney David McDade. House Speaker David Ralston stood alongside Governor Deal during the ceremony. Lt. Governor Casey Cagle was not there.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Cherokee Charter Academy: The Perfect Place to Sign House Bill 797
Mike Klein
Cherokee Charter Academy almost never happened. Last spring it seemed possible – maybe even probable — that Cherokee Charter would never open because of a state Supreme Court decision. What a difference a year makes. Governor Nathan Deal will visit the school Thursday morning when he signs legislation to create the structure for a new state charter schools commission.
“We’re very excited that not only is the Governor pro-charter but he is coming to our school to sign House Bill 797,” said Cherokee Charter Principal Vanessa Suarez. “At the end of the day, all politics aside, we are here for the kids. We are here for our students that want a choice.”
This signing ceremony could have been done anywhere, including at the State Capitol. Doing it at a charter school that thrived despite constant disapproval by the local school board will send a succinct message: School choice is a good idea that is consistent with quality local public education. Perhaps the Cherokee County school board should get on-board.
Georgia will create a new charter schools commission next year if voters statewide approve a constitutional amendment that is on the November ballot. The new commission would consider but is not required to approve charter school applications only after they are rejected locally.
You can find nearly all the arguments for-and-against state authorization of charter schools in Cherokee County. A well-regarded school district that spends more than one-half billion dollars per year nonetheless wails publicly about tight budgets. In doing so, it tries to portray a start-up charter school with a tiny budget as a threat to public school funding. The start-up serves about 2% of the county’s public school students and it is a long way from being a threat to status quo.
Vanessa Suarez, Principal, Cherokee Charter Academy
The Cherokee County school board has never approved a local charter school application. It rejected Cherokee Charter Academy three times, including twice last year and again for the 2012 – 2013 school year. The Academy in Canton opened with about 825 students last August after it received a state charter and state funding authorized by Governor Deal.
Funding is a relative term. State records indicate state, local and SPLOST funding amounts to $8,749 per pupil in the traditional Cherokee County public schools. This year Cherokee Charter Academy received $5,000 per pupil in average total funds from all sources. It does not receive local tax dollars or SPLOST capital expenditure funds.
A Cherokee County school board majority and Supt. Frank R. Petruzielo have repeatedly portrayed this issue as local, and say their concern is about the Cherokee schools.
Then last week the Cherokee board passed a resolution by a 4-2 vote that “requests that voters of the State of Georgia not support the Constitutional Amendment relative to charter schools.” Now it is about more than Cherokee County; now it is about stopping state charters everywhere.
Carrying the title “Resolution in Support of Quality Public Education,” the slightly longer than one page document is long on rhetoric about “an already underfunded public education system, resulting in overcrowded classrooms, shortened school calendars, insufficient textbooks and other curricular supplies and employee furloughs, with no end in sight” but it fails to recognize that all charter schools are public schools. Let’s try that once more for those who might be newcomers here: all charter schools are public schools.
The resolution is wrong and misleading when it tries to create the perception the state could “take and redirect local school tax dollars for the aforementioned purposes,” those purposes being to support state charter schools.
The constitutional amendment legislation stipulates only state dollars would be used to support state charter schools. No local tax dollars would be redirected to state charter schools. State funding to local school systems would not be reduced because any student leaves a traditional public school to enroll in a charter school. Therefore, the resolution is misleading and false.
So to recap: Cherokee Charter opened with 825 students last fall and it received about $5,000 per pupil in total funding from all sources. All local tax dollars and all SPLOST dollars for those students stayed with the Cherokee County public schools system. Somehow those two ideas did not make their way into the “Resolution in Support of Quality Public Education.”
Cherokee County is a destination location. It is a nice place to live. It has jobs. It has good real estate values. It has parks. It has a 74% high school graduation rate, less than 85% claimed by the school district but still better than the 67% statewide average. So, it has good schools. This year the district will spend $527 million to educate 38,766 students. The district has almost as much staff – 2,169 – as it does teachers – 2,343.
This August the traditional school district will expand its STEM and fine arts programs, which Cherokee County board member Michael Geist sees as a response to Cherokee Charter Academy. “I don’t know if I care too much why they did this. I’m just glad they did,” said Geist, who was elected to the traditional county board but has two children enrolled at Cherokee Charter Academy.
Geist voted against the constitutional “Quality Public Education” resolution. “It seems like every idea worth investing in gets shot down by the education lobby and the education establishment,” Geist said. “We don’t even get a chance to really find out if charter schools can work well.”
What a difference a year makes. Cherokee Charter Academy almost never happened. This fall the Academy will add eighth grade and enroll 1,000 students. The Academy was also selected to participate in a middle schools program offered by Cambridge University in England. This is a long way from not knowing whether your doors would open.
“We have learned the difference between a shock and an aftershock,” said board member Lyn Michaels-Carden. “A year ago the things that happened to us shocked and stunned us and sometimes we were distraught. Now because of everything we’ve been through it’s a lot easier to have perspective. You get to the point where you recognize what’s really important.”
Cherokee Charter seems like a perfect place to sign charter schools commission legislation.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Will Georgia Avoid Last Year’s Farm Labor Shortage Fiasco?
Mike Klein
This summer the U.S. Supreme Court will decide what authority if any states have to determine immigration policies within their borders. This year the Georgia agriculture industry hopes to avoid a repeat of last year’s fiasco when just the possibility of a new state law caused seasonal workers to leave or avoid the state; an estimated $400 million in crops rotted in the fields.
Wednesday morning the Supreme Court heard arguments in the Obama administration effort to stop Arizona’s immigration law. Arizona says the federal government has failed to stop the migration of illegal immigrants from Mexico. The Obama administration says states have no legal authority to control any aspect of immigration law.
This is the reality of it: Eight U.S. Supreme Court justices and three judges on the 11th Circuit Court of Appeals in Atlanta could determine whether Georgia has enough migratory labor force to pick and pack fruits and vegetables worth billions of dollars. Right now it is a chess game because the nation does not have a migratory guest worker program that actually works well.
“Cautious is the right word,” said Georgia Fruit and Vegetable Growers Association Executive Director Charles Hall. “We are pretty confident we will be okay, but if the Supreme Court ruling basically allowed the Circuit Court to rule that the Georgia law is constitutional and they can enforce the show me your papers section, we’ll have the same fiasco we had last year.”
“Show me your papers” is a section of Georgia’s 2011 immigration law that would allow local law enforcement to detain anyone who is not carrying proof that they are in the country legally. The bill had not even become a law last spring when migrant workers began to bail on Georgia.
“A lot of workers went to North Carolina,” said Georgia Agribusiness Council President Bryan Tolar. “That happened. They didn’t flee the country. They fled to other states where they didn’t feel those pressures existed.” Using industry provided data, the University of Georgia said 11,000 agriculture jobs usually done by seasonal migrant workers went unfilled last year.
Two sections of last year’s Georgia law – including “show me your papers” – are on hold after a challenge filed by several plaintiff organizations. A federal judge stayed those sections pending review. The three-judge 11th Circuit Court of Appeals in Atlanta heard arguments on March 1. No ruling is expected until after the U.S. Supreme Court decides the Arizona case.
Here is why all this matters. Crops don’t wait for courts to make up their minds. A mild winter means some Georgia crops will be ready to harvest weeks ahead of most years. Berries are coming out of the fields now. Onions are underway and other crops within the next few weeks.
Migrant labor sustains domestic agriculture. The work Americans will not do to harvest their own food is done by seasonal workers who are willing to earn $9.39 per hour – and sometimes a bit more if they work fast – to pick and pack crops. How do we think berries get into grocery store boxes? Someone picks and packs them. That person is usually a migrant worker.
But millions of illegal migrants – a high percentage from Mexico – have overwhelmed social services, particularly state Medicaid budgets. States continuously plead with Washington for better federal control of the U.S. border with Mexico. Arizona passed its version of immigration law in April 2010. Georgia, Alabama, Indiana, South Carolina and Utah also passed laws.
On one hand you have the agriculture industry in desperate need of seasonal migrant workers. On the other hand you have states trying to control their borders and social services costs. Those ideas don’t mix well and Congress has failed to enact guest worker program relief.
About 33 Georgia producers rely on H2A – the existing federal program to provide legal migrant workers. But industry insiders say the program is flawed, applications are often delayed or lost and they cannot rely on it. “We had guys with onions laying on the top of the ground because (workers) did not arrive on time” this year, said Georgia Department of Agriculture commissioner Gary Black.
Last year – faced with rotting crops – Georgia tried to innovate. Probationers were offered the chance to work alongside migrants in blistering hot fields. Not surprisingly, fewer than a couple dozen even tried to participate and the heralded initiative fizzled under the blazing sun.
Georgia agriculture is a $68.9 billion per year industry that needs to fill 80,000 seasonal jobs. It doesn’t need them all at once. It needs some in the spring; it needs others through the summer and into fall. Geographically, the primary need is in the southern portion of the state.
No one can predict what a court will do, but there is some logic to how this might play out. If the U.S. Supreme Court upholds the Arizona law, the 11th Circuit Court in Atlanta could decide that Georgia can begin to enforce the so-called “show me your papers” law. If the Supreme Court overturns the Arizona law then all immigration issues will likely be in the hands of Congress.
The final word here comes from Bryan Tolar at the Georgia Agribusiness Council: “Where do we go from here? We have a state that is concerned about providing services to people who are in the country illegally. We have our largest economic engine that relies on labor and we can’t find the people domestically. If you can’t fill the need, what do you do?”
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Magic Johnson’s Partnership with Provost Academy Georgia
Mike Klein
Magic Johnson’s parents never earned high school diplomas. However, they made it clear to four sons and six daughters that failure to graduate from high school was not an option. “They were on top of us every day,” Johnson said in Atlanta. Today five of his six sisters are Michigan public school teachers and the sixth is an elementary school principal. “I am looking at all these educators in my family after my mom and my dad finished seventh or eighth grade.”
Magic Johnson is one of the most recognizable people in the world. Famous initially for his ability to do things with a basketball that mere ticketholders could only imagine. Famous now because in life after basketball Johnson has created businesses that employ thousands of mostly inner city people, led campaigns for AIDS research and he has invested time, money and two decades into the idea young people can be given the tools and inspiration to graduate from high school, pursue more learning and become successful adults.
Oh, yes, Johnson recently became part-owner of the Los Angeles Dodgers. But it was books not baseball or basketball that brought Johnson to Atlanta this week. Johnson said his new program — Bridgescape Learning Centers, focused on dropout prevention and recovery – will become a resource at Provost Academy Georgia, the state’s newest online high school. Provost’s parent is Edison Learning, a New York-based digital learning company that has schools nationwide. Provost is expected to open this fall.
Bridgescape will focus on young men and women who have quit or are at-risk to quit school. It will provide a path to a high school diploma through a state-approved online high school. Bridgescape will be unique from other good programs that offer GEDs – general equivalency diplomas — that are not real high school diplomas. The Provost Academy – Bridgescape model is blended learning – digital combined with individual, face-to-face instruction, computers, internet access and personalized lesson plans.
Magic Johnson
The Magic Johnson Enterprise partnership with Edison Learning was announced last fall. Bridgescape Learning Centers have already opened in several Ohio cities. Provost Academy Georgia is an expansion. There could be as many as seven statewide learning centers but their locations are a work in progress.
Provost Academy Georgia was scheduled to open last fall as Georgia’s first fully accredited online high school. However, it got caught in the state charter schools commission controversy so the opening was delayed. Provost will announce when it is ready to accept student applications for next fall.
Magic Johnson’s financial worth is estimated at $500 million. He could be doing other things with his time and money but this is what Johnson does by choice. For 20 years the Magic Johnson Foundation has proposed and funded possible solutions to challenges faced by America’s urban communities.
Education is a big part of that focus. Nationally one-in-three students – many in urban communities — will quit high school. Some 1.2 million students drop out every year, 7,000 leave school every day, one quits every 26 seconds. Inner city minority youth are a big part of that drop out picture.
“A huge number of African American kids are dropping out,” Johnson said. “I want to make sure we bring them back into our program. We know that, unfortunately, if you don’t have a high school diploma normally our kids turn to crime. We’ve got to quit losing kids to the jail system.”
State school superintendent John Barge not only attended Johnson’s news conference, he was an enthusiastic participant. “When we start talking about recovering the dropouts, this is probably one of the few opportunities children have to come back and earn a high school diploma,” Barge said. It is not lost here that Barge enthusiastically encouraged an idea that is operating outside the usual state path.
Georgia recently announced that last year it had a 67% on-time high school graduation rate. “That means over the last several years we have hundreds of thousands of people without a high school diploma,” Barge said. “We know without a high school diploma there is no hope for these children.”
Earvin Johnson Sr. and his wife Christine moved from Mississippi to Michigan because there were jobs in the auto plants that did not require a high school education. “Today that’s not the case,’ said their famous son. “Today you have to have a diploma to get a job at those same plants.” Johnson had nine brothers and sisters. His mother worked as a custodian. His father had a shift at General Motors.
Magic Johnson was an absolute basketball prodigy in Lansing, Michigan. It was obvious to anyone who watched that there was something special about the 6-foot-9 young man who saw the basketball court as a canvas. His job was to make things happen on the canvas that folks had not seen before. From Michigan State to the NBA to life after basketball, Johnson continues to make things happen.
The Magic Johnson Foundation has funded 18 urban community technology centers, including one in Atlanta. It has funded hundreds of college scholarships, including help for students who attend several Georgia public universities, along with Morehouse and Spelman. The Foundation has donated millions of dollars to online learning programs, and the hardware and software projects required to support learning.
“My whole life and the mission of the Magic Johnson Foundation has been urban America,” Johnson said. “I came up through the neighborhood. You’ve got somebody who knows, who understands. I’m not going to let the kids have excuses. All of us have come together because we have one common goal, how do we graduate these young people who have dropped out, who maybe learn in a different way? How do we make it better for young people? They must graduate from high school.”
This is what Magic Johnson does, simply because he can and someone should.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Lack of Venture Capital Means Lost Jobs, Lost Opportunity
Mike Klein
When Advanced Catheter Therapies announced a new technology patent in January the dateline was Chattanooga. The press release noted, “The Company recently announced a name change from Atlanta Catheter Therapies.” No longer located in Georgia, Advanced Catheter raised almost $3 million from Tennessee-based investors after it became frustrated with Georgia’s inadequate venture capital opportunities. One of the investment requirements was relocation to Tennessee.
“Everybody I talked to in Tennessee, it was like, how can I help you?” said ACT founder Paul Fitzpatrick who commutes to Chattanooga from his home in Atlanta’s northern suburbs. He recalled conversation after conversation that went something like, “What doors can I open to help you succeed?”
Advanced Catheter is one among many examples that illustrate Georgia is pretty darn good at creating attractive companies, but it has some real problems holding onto them at certain venture capital stages. Governor Nathan Deal admitted as much when he spoke to an Atlanta Press Club audience this week, saying, “We know that one of the things that we are lacking is venture capital for start-up companies.”
The General Assembly passed no venture capital legislation this year, although it did consider two bills. “One of the reasons that we are losing start-up companies is they are able to be siphoned off by Boston and they’re able to be siphoned off by the Silicon Valley,” Deal said. “Having that capital available is important. We are going to continue to work on it.”
The closest that Georgia came to venture capital legislation is a pension reform bill the Governor signed Monday. This law will allow the Employee Retirement System to invest up to 5% (about $750 million) of its total assets (about $14.9 billion) in venture capital and other investments specifically named in the bill. No more than 1% (about $150 million) could be invested in each of five consecutive years.
The legislation is so specific that it cannot be interpreted to make investments funds available to entrepreneurs trying to create the next big idea in Georgia. For instance, something as big as Internet Security Systems – better known as ISS – that was incubated here by Chris Klaus and Tom Noonan.
ISS is among Georgia’s best technology success stories, not quite ranking up there with Ted Turner’s invention of CNN and other enormous technology platforms at Turner Broadcasting, but similar to the creation of internet service provider MindSpring by Charles Brewer back in 1994.
Klaus was a Georgia Tech undergrad in 1993 when he became intrigued by the development of software to help businesses defend themselves against computer hackers. Fast forward a few years and you find Klaus, then in partnership with Noonan, out on the stump looking for Georgia venture capital investors to grow their business. There simply weren’t any in Georgia with the resources that ISS needed.
Eventually, Klaus and Noonan secured millions of dollars in venture capital investment from two Boston firms that allowed ISS to remain in Atlanta. ISS eventually employed more than 1,650. Six years ago ISS was sold to IBM for about $1.3 billion. Klaus and Noonan are Georgia entrepreneurial icons and home grown innovators who’ve moved onto other ventures.
ISS was able to stay and build its brand in Atlanta. Regrettably, that is often not the case.
SolidFire left Atlanta for Boulder, Colorado, when the innovator of solid-state storage systems for cloud service providers secured $11 million in Colorado-based venture capital funds. NightRaft moved to Austin, Texas, where the company is staking out a position in live entertainment event smart phone apps marketing which NightRaft says is a $1 billion per year industry.
It’s not just new businesses. Georgia has also lost established, highly successful businesses.
A University of Georgia scientist founded AviGenics in 1996 after he developed a protein production technology. Twelve years later AviGenics was rebadged Synageva Corp. when it closed $17 million in Massachusetts venture capital financing. Today it focuses on rare diseases. Some parts of Synageva remained in Georgia but major components of the company moved to Boston.
This year – and this week — we’ve seen announcements that thousands of new Georgia jobs will be created by major corporate expansions and relocations. Thursday morning Governor Deal said Illinois-based pharmaceutical researcher Baxter International will bring 1,500 jobs to a new $1 billion facility near Social Circle about 40 miles east of Atlanta. Baxter joins Caterpillar, Carter’s and Toyota who have announced similar decisions to expand in Georgia.
Georgia has demonstrated it can attract corporations. But will it create the same sense of urgency around assistance to state-based entrepreneurs? Venture capital is a first tier priority. Georgia must foster supportive innovation so that our entrepreneurs keep 21st Century keep jobs here. Or, we can just continue to watch them leave Georgia for other states.
(Mike Klein is Editor at the Georgia Public Policy Foundation)
Another View Piece Published by Atlanta Journal-Constitution
(This article was published in the Sunday April 15 Atlanta Journal-Constitution)
Mike Klein
This year, Georgia legislators took down some barriers in tax, pension and criminal justice reform but they whiffed on creating a state-assisted venture capital investments model. Next January, they need to take another step forward in tax reform, monitor the start of criminal justice reforms, enact juvenile code reforms and create a real strategy around venture capital investments.
Tax reform this year included sales tax changes to benefit industry, the beginning of the end for the hated annual tax paid on personal vehicles, sales tax added to some online purchases and a gimmicky sales tax holiday. That is not enough. Comprehensive tax reform must include a decision — or at least a full blown discussion — about whether to revise the state’s 6 percent maximum income tax rate, which is widely considered to be non-competitive against states like Florida and Tennessee with no state income tax. Proponents of, say, a 3 percent to 4 percent maximum rate argue it will benefit Georgia’s emerging high-tech and bioscience industries.
One way to offset the change in income tax revenue would be to revise the state sales tax. That would require lots of buy-in over the next year. Income taxes fund about half the state budget. Local governments will be concerned about the impact of changes.
Two bills attempted to stimulate Georgia’s nascent venture capital investments industry. Both were controversial, highly political and neither passed the Legislature. Georgia continues to incubate businesses that move to other states when they need more venture capital. The Legislature must deal with this issue before more businesses and jobs lost.
Pension reform is another barrier that began to come down this year. The state Employees Retirement System is now authorized to invest up to 5 percent (about $750 million) of its available total assets (about $14.9 billion) in venture capital pools and other private placements specifically named in legislation. Georgia public sector pensions are well-funded in comparison to many states. However, public sector pensions nationally are under pressure as boomers begin to retire and state revenue is slow to recover from the recession. Eventually, the teachers’ retirement system should be included. Currently it is not, which is their choice.
Everyone agreed it is time to move forward with criminal justice reforms that will emphasize treatment over incarceration for some low-level property offenders and drug users. This is recognition that current strategies created swollen prison populations and caused havoc with budgets. Adult system reforms will take years to implement and it will be impossible to evaluate their success soon.
Georgia’s juvenile code, unchanged for decades, came up short this year. Gov. Nathan Deal’s office put on the brakes until there is a better understanding of the financial impact. There is universal support for changing this code that regulates foster care, permanent placement hearings, adoption codes, family mitigation hearings, status offenders and parental rights. This bill should become law next year if the financial analysis makes sense.
(Mike Klein is editor at the Georgia Public Policy Foundation.)
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