Mike Klein Online

All Different Flavors to Shrink Georgia State Government

Updated: Wednesday March 24

Some folks are showing their serious side about how Georgia state government might reinvent.  One bill currently before the Georgia House arrived as pretty much a surprise move and would combine agencies that seem to have very little in common.  Another House bill would launch a ten-month tax and revenue reform project, which if done correctly, is an opportunity to engage Georgians.

There also were good, fresh ideas in a recent Budget Task Force report commissioned by Casey Cagle, but the lieutenant governor did little to enthusiastically endorse his own study group when nearly four dozen best practices ideas were announced last week.

First:  The outcry to make state government smaller could combine three very different agencies.

Super-sizing Several State Agencies?

Friday fast approaches, this year also known as Crossover Day, the magical 30^th day on the Georgia General Assembly calendar when legislation must pass either the Senate or House to survive another day.  Legislation that does not pass one of the two chambers is essentially dead for the session.

One bill that will either live or die after Friday would consolidate three existing agencies into one new larger entity with six dependents.   The existing Department of Administrative Services, State Personnel Administration and State Properties Commission would be abolished and re-constituted as the Georgia Services Administration, a new agency with wide-ranging responsibilities from copy paper to pensions.

Rep. Doug Collins (R) of Gainesville is the House Bill 1431 primary sponsor.  Collins is joined by five powerful Republican leadership co-sponsors:  Majority Leader Jerry Keen, Appropriations chair Ben Harbin, Appropriations vice chair Carl Rogers, House majority whip Edward Lindsey and Banking chair James Mills.   We placed a call to Collins to discuss 1431, but he was unavailable before this update was published.

Combining DOAS, SPA and SPC into a single entity has been a closely-held idea.  So close, in fact, that a spokesman for Governor Sonny Perdue said, “We were not consulted during the drafting of the bill, so we have just recently seen the bill and are looking at it now.”

Communications director Bert Brantley said 1431 might be “loosely based” on a 2004 Commission for a New Georgia recommendation that was not carried forward by Governor Perdue.  Two agencies that would be affected by 1431 also said they did not know about the bill until it was introduced last week.

Here’s a thumbnail look at all three agencies that would combine into a new entity:

Department of Administrative Services: Better known throughout government land as DOAS, this $160 million per year agency is state government’s business agent.   It secures commodities, services and manages the state vehicle fleet.  DOAS handles state government risk management, essentially, self-insurance.  It also makes and enforces state government credit card policies.

State Personnel Administration: SPA is the state’s employment agency.  Every state employee has a file at SPA and everyone who wants a state job will be vetted by SPA.  Within the past two years SPA has undergone an exhaustive review of all state personnel employment policies.   SPA was known as the Georgia Merit System until two years ago when it was re-branded with a new name.

State Properties Commission: SPC acquires, manages and disposes of real estate properties not associated with the University System Board of Regents or the state Department of Transportation.  The portfolio includes 15,000 state-owned properties, 1,800 state leases and 1.1 million acres of land.  Some property donated to the Department of Natural Resources is exempt; some property associated with Technical College System student projects is exempt.

House Bill 1431 does not describe why DOAS, SPA and SPC should merge.  There is no reference to achievable cost savings or personnel reductions.  The new agency would have jurisdiction over 80,000 non-education system employees, the workers’ compensation trust fund, statewide procurement and the state’s public – private technology venture.  Those are the big ideas, big responsibilities.

The bill also stipulates that vehicles with 16-inch or larger original tires shall be outfitted with retread tires as required, that printer cartridges shall be reused, that 95% of all purchased papers must be recycled content, that agencies shall print on both sides of copy paper and that wherever possible, agencies shall discontinue using 8 ½” x 14” paper.  Those are the smaller ideas.

The Georgia Aviation Authority, Office of Treasury and Fiscal Services, Office of State Administrative Hearings and Georgia Technology Authority are currently attached to DOAS for administrative purposes and would remain attached to GSA for the same reasons.  They would be joined by the State Accounting Office and Georgia Building Authority.

If this bill becomes law, the new Georgia Services Administration would open for business July 1 this year.

That calendar seems fairly ambitious for an idea few people knew about until a few days ago.

Tax Reform and Fairness for Georgians

The essential reason to reinvent state government revenue in a separate process is because Georgia cannot downsize government services and personnel,  manage the annual budget and reinvent an income stream within the confines of the General Assembly.  It’s too much to ask at once, especially during the current desperate economy in which even tiny miscalculations could prove to be financially fatal.

So it’s almost mandatory to step outside the General Assembly process.  House Bill 1405 would create the 2010 Special Council on Tax Reform and Fairness for Georgians.  Its findings would be reported to a new panel, the Special Joint Committee for on Georgia Revenue Structure in time to create 2011 General Assembly legislation.

Special Council members who are identified in the legislation would include outgoing Governor Sonny Perdue, four prominent economists, private industry executives and four appointed public members.  This group would continue work after the legislature leaves town to create a new and presumably different state tax and revenue structure. The council’s report would be turned over to the Special Joint Committee and submitted as legislation next January.

The process is modeled after BRAC – the federal government’s Base Closure and Realignment Commission — that recommends closures or expansions of U.S. domestic military bases.  Under BRAC, Congress must vote up or down on recommendations, without changes.

Similarly, General Assembly members would not be permitted to offer tax reform amendments.  Standard committee hearings would not occur and the legislature would be directed to act on Special Council “resolutions incorporating without significant changes the recommendations of the council.”  This is exactly how BRAC functions.

House Bill 1405 contains no language to create public hearings, receive strategic community based input, or to conduct statewide meetings to take the temperature on new revenue ideas.  But the opportunity is there and it could help create the consensus around big ideas.

Georgia requires revenue reform.  Whether reform comes from reinstating sales tax on food, moving toward casino or horse racing revenue, or any other new form is best discussed outside the awkward confines of the General Assembly.  Start with ideas, spread them around and let them build their own momentum.  This is how you build consensus.

Budget Task Force Strange Endgame

You have to wonder what Lt. Governor Casey Cagle anticipated from a Budget Task Force he announced in January under the glare of State Capitol Rotunda television lights with a couple dozen reporters, task force members and two influential senators gathered to hear about cost-cutting in Georgia.

Seven private industry and non-profit executives worked for two months to generate four dozen recommendations that addressed education, health care, shared services, best practices and how to manage the state’s significant real estate portfolio.

The group recognized that declining state revenues and increased costs of all kinds, especially Medicaid and state employee health insurance costs, could have an eventual negative impact on the state’s current AAA bond rating, the best you can get from the ratings houses.

Then the report was released with a whimper, not a bang.  The lieutenant governor did not leap to enthusiastically support any proposals.  He did say, “There are many of the recommendations that are very viable and there are some that will be politically un-viable. These people (the task force) are looking at this without political lenses on.”

This was a strange ending to an idea that had so much merit back in early January.

The ideas are still there, for anyone who wants to consider them.

Additional Resources

Budget Task Force Report, http://tinyurl.com/yjkepok

Georgia General Assembly legislation search page, http://www.legis.ga.gov/legis/2009_10/

March 23, 2010 - Posted by mikekleinonline | Uncategorized | Budget Task Force, Casey Cagle, Georgia, Georgia House Bill 1405, Georgia House Bill 1431