Mike Klein Online

Governor Deal Pushes Medicaid Fix; Proposes $19.8B Budget

Mike Klein

Mike Klein

Governor Nathan Deal has proposed a $19.864 billion state dollars budget for the new fiscal year that starts in July, up about 2.7 percent from this year’s $19.341 billion budget.  The Fiscal 2014 proposed budget was released on the Governor’s Office of Planning and Budget website while Deal delivered his State of the State address at the Capitol.

Total state spending next year would be about $40.837 billion with the other $21 billion being anticipated federal funding.  The trend line here continues to be fiscal savings and a big emphasis on health care cost strategy.  Nearly all state agencies were asked to cut their next year budgets by 3 percent and some by higher percentages.

Governor Deal devoted the bulk of his address to four policy areas – public safety, education, health care and economic development – but he ended with comments on ethics, stating, “If there is to be an expansion of the code of ethical conduct for members of the General Assembly, it should apply equally to all elected officials at the state and local levels.”  The state Senate has passed one ethics bill and the House is expected to have a bill.  However, Deal’s statement was significant in that he said ethics state law should apply to local officials.

Medicaid costs again dominated his health care comments. The Governor urged passage of his legislation that would authorize the state Department of Community Health board to continue that hospital provider fee that would otherwise sunset this June.  “Unless this is done, there will be a shortfall in revenue to support the Medicaid program of nearly $700 million,” Deal said.

The so-called temporary fix to Medicaid expense was imposed by the 2010 General Assembly.  Deal’s bill would transfer responsibility for continuing that fee to DCH board members, giving legislators a free pass.  The fee would raise about $241 million next year, according to the Governor’s proposed budget.  The Senate passed the bill 46 – 9 later Thursday; the legislation now travels across the Capitol to the House.

2013 State of the State Address(Photo Courtesy Alana Joyner, Office of the Governor)

2013 State of the State Address
(Photo Courtesy Alana Joyner, Office of the Governor)

“Since we cannot adjust benefits, the reduction in reimbursements to hospitals would be the only way to keep the program solvent,” Deal told legislators.  “These reductions would be approximately 20 percent, which would seriously jeopardize many of our state’s hospitals.”  On Wednesday Deal said perhaps 12-to-14 hospitals would close if the fee is allowed to sunset.

The Governor’s address created no significant new policy sectors.  Deal recognized “times have been tough” economically but he vowed, “I will not lead our state with a Doomsday mindset.”  His proposed budget includes spending cuts of at least 3 percent for nearly all state agencies except K-12 public education.  Selected state agencies begin three days of public budget hearings next Tuesday.

“Just as Georgia is too big and too important to fall prey to Doomsayers’ pessimism, it is also too big and too important to be divided by race, geography or ideology,” Deal said.  “This year let’s concentrate on the things on which we can all agree.”

Three education announcements should encourage families:  The Pre-K school year would be restored to 180 days, a 10-day increase over this year’s funding level, in the governor’s budget and Deal proposed a 3 percent funding increase to $600 million for the HOPE program.  One year ago there were projections that HOPE was on a financial slide to insolvency.  And, $147.3 million will be added to the K-12 education budget for enrollment growth and teacher training.

The governor said the state’s 28-year-old public education funding formula “does not meet the needs of a Twenty First century classroom,” and he added, “Georgia has had too many school boards under the sanctions of potential loss of accreditation.”  Deal said reasons why school systems lose accreditation must be addressed by state legislation.  “Poor outcomes are most often not the result of lack of money, but lack of vision and leadership,” the governor said.

2013 State of the State Address(Photo Courtesy Alana Joyner, Office of the Governor)

2013 State of the State Address
(Photo Courtesy Alana Joyner, Office of the Governor)

Deal encouraged legislators to build on last year’s unanimous passage of adult corrections reforms and to adopt juvenile system reforms that would reduce incarceration expenses for non-violent youthful offenders.  The state spends $300 million per year on juvenile justice.  “Just as with last year, we stand to lower recidivism and save taxpayer dollars,” Deal said.

The governor said state economic development initiatives have produced 10,000 new jobs since his last State of the State address.  He also said state per capita spending is down 17 percent within the last decade and state government now employs 9,000 fewer people than five years ago.  “We have reduced the burden on Georgia taxpayers,” Deal said.

Deal said the  state “rainy day fund” now has $378 million in cash reserves, which is a 226 percent improvement since Deal took office, and that has enabled Georgia to retain its Triple AAA bond rating.  However the balance is well below pre-recession levels of about $1.6 billion.

The Governor proposed stronger DUI alcohol laws for boaters to bring them into line with drunk driving laws and mandatory life jackets for all persons 13 years old or younger who are riding in a boat or using a personal watercraft.  Currently there is a great deal of national emphasis on gun control and public school safety, but Deal did not address either topic in his remarks.

Additional highlights from Governor Deal’s proposed budget:

  • Increase basic K-12 education funding by more than $156 million.
  • Increase Pre-K early care and learning funding by $12.9 million to $312 million.
  • Increase K-12 equalization grants by $41 million for the poorest school districts.
  • Increase university system funding by $84.6 million to fund growth.
  • Increase university and technical college system capital investments by $247 million.
  • Increase state funding by $50 million to $231 million for the Port of Savannah project.
  • Increase state funding by $2 million to train health care career professionals.
  • Commit $69.8 million to fully fund the state share of teacher retirement system.
  • Commit $60 million to fund new transportation projects in FY 2013 and FY 2014.
  • As promised earlier, end the user tolls paid by drivers on Georgia Route 400.
  • Proposed $25.2 million in bond sales for water supply projects.
  • Proposed $15 million in bond sales for Georgia World Congress Center upgrades.
  • Proposed $26.5 million in bond sales for state parks and lands improvements.
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January 17, 2013 - Posted by | Uncategorized | , , , , ,

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