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New budget continues irresponsible path
Legislative update
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A majority of the House of Representatives voted this week to approve a $17.8 billion state budget for fiscal year 2011. I was among the 52 House members voting against the spending plan because it is a continuation of the misguided priorities and fiscal irresponsibility that have plagued Georgia for the last eight years.
Public education should always be the state’s top budget priority, but HB 948 proposes to reduce another $527 million in Quality Basic Education formula funding to local school systems. This brings the total reduction in public school funding under the Perdue administration to more than $2.1 billion, hurting our children and shifting the tax burden from the state level to local property owners.
This continued assault on public education funding in the name of “austerity” is akin to rearranging the deck chairs on a sinking ship. In this case, it is our students and local property tax payers who will need the life preservers.
HB 948 now goes to the Senate for its consideration.
Before the budget vote, House leaders used a sleight-of-hand trick to pass a tax increase totaling more than $250 million by amending the legislation to include two relatively insignificant tax cuts.
HB 1055 was originally a proposal to increase registration, licensing and user fees on more than 80 services provided by the state, bringing in approximately $96 million. The increased costs to citizens affect a broad range of fees, including civil court filings, business registrations, specialty car tags and numerous annual license fees charged by the Department of Agriculture.
As passed last Wednesday, HB 1055 also includes a 1.45 percent tax increase on hospitals and their patients, which will generate approximately $169 million. The infamous “sick tax” was actually approved earlier in the session, but differences between the House and Senate versions led to a compromise under which it would be rolled into HB 1055.
Terrified of a looming Tax Day Tea Party protest and the upcoming candidate qualifying period, House leaders added a couple of artificial sweeteners to make the tax increase medicine go down better, in the form of two minor tax cuts. One would phase out the state’s 0.25-mill property tax over time, an almost insignificant gesture considering how much of the tax burden the state has shifted to local property owners over the past eight years. This tax cut will save the average homeowner only $31 compared to the $260 average tax increase they absorbed when the governor and the legislative majority eliminated the Homeowner Tax Relief Grant a year ago.
The other tax cut would gradually eliminate the income tax on retirement income for Georgians age 65 and older between now and 2016. Because retirement income of up to $35,000 for individuals and $70,000 for couples is already exempt, this action would actually help only the wealthiest retirees in the state.
The tax cuts in HB 1055, if signed into law by the governor, will hardly offset the hospital tax increase and the fee increases. There is an additional concern over whether the legislation is even legal because it combines tax code changes with fee increases.
Sadly, those in power have chosen once again to balance the state budget on those already suffering: sick hospital patients, underfunded public schools and overburdened property tax payers.
GEFA loan sell-off: Also this week, a slim majority of House members voted to approve an amended version of HB 244, which includes the governor’s proposal to sell a portion of the Georgia Environmental Facilities Authority loans on Wall Street in order to raise some $290 million to help balance the budget. Because these loans are valued at $676 million, it makes no sense to sell off these assets at less than 50 cents on the dollar for a one-time budget fix. GEFA loans are made by the state to local governments at low interest rates to finance infrastructure projects across the state. Selling off this revolving revenue source will likely destroy the program, ruin Georgia’s AAA bond rating and force more expensive borrowing by local governments.
Economic update: Gov. Perdue announced that for the first time since November 2008, the monthly collection of state revenues reflected an increase in March. Net revenue collections grew by $10.5 million last month, to $998.2 million from $987.9 million in March 2009. While representing only a 1 percent increase, it was the first positive piece of economic news in well over a year for Georgia lawmakers and is hopefully the sign the downturn in state revenues is beginning to level off. Less encouraging was the unemployment report for March, which showed Georgia’s jobless rate increased slightly to a record 10.6 percent.
A few days left: The General Assembly reconvened Tuesday for the 37th legislative day of the 2010 session, which is now scheduled to adjourn on Thursday, April 29. This is reportedly the longest legislative session in Georgia since the 1880s.

Williams represents the 165th District (Liberty County) in the Georgia House of Representatives. Contact him during the legislative session at 511 Coverdell Legislative Office Building, Atlanta, Ga., 30334; by phone at 404-656-6372; or by e-mail at

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