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 misplaced 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. HB 948 now goes to the Senate for its consideration.
Before the budget vote, House leaders maneuvered 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, 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.
House leaders attempted to make the measure more politically palatable with the addition 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.
The other tax cut would gradually eliminate the income tax on retirement income for Georgians 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 likely impact of these two tax cuts is to cost taxpayers more in increased county property taxes than they receive from the cuts themselves. Cutting state funding for local government and for our schools tends to have costly unintended consequences.
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 (GEFA) 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.
In other action this week, the House approved the following legislation:
HB 194, which as amended would require a pharmacist who substitutes a generic drug for a brand-name prescription to include on the prescription label that the substitution has occurred.
SB 355, which addresses the issue of who has the right to handle the disposition of the body of a deceased U.S. service member, utilizing a form that allows service members to designate an authorized person to handle their bodies in the event of their death.
SB 374, which would create the Legislative Economic Development Council to evaluate the state's overall economic development strategy, including tax breaks aimed at job creation, and report its findings to the governor and legislature.
SB 397, which would create a "Blue Alert" system to assist in the apprehension of violent criminals who have killed or seriously injured a law enforcement officer.
HB 903, which would extend Atlanta's hotel-motel tax to generate funding for a new domed stadium or renovation of the Georgia Dome to keep the Atlanta Falcons in downtown Atlanta.
|