ATC Capitol Update – Week 4, February 6, 2012

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Today is the 15^th legislative day of the 40 day session and the General Assembly will be in session Monday through Thursday this week.

BUDGET

Every session, legislators have two budgets to pass. The first budget they deal with is the amended or “supplemental” budget for the current fiscal year (Georgia’s fiscal year runs from July 1 to June 30). This is where the budget passed by the previous year’s General Assembly gets revised up or down as actual revenues for the year are compared to the revenue numbers that were projected when that budget was originally passed. Since the supplemental budget is really just an amendment to the current year’s budget, this budget usually passes in the first half of the General Assembly session.

The other budget is the “big budget” or the budget for the coming fiscal year. Legislators work on this budget from the beginning of the legislative session often until the very last hours of the very last day of the session. This is the budget where policies are made, priorities are set and marching orders are issued to the state government for the coming year.

On Friday, the House approved the Amended FY 2012 state budget, increasing overall state spending by approximately $255 million more than the FY 2012 budget approved last year (for a total FY 2012 state budget of about $18.6 billion). It includes approximately $700 million in additional spending for transportation (including $300 million for the I-75/I/575 project and about $14 million in additional money for K-12 education.

FUNDING FOUND FOR I-75/I-575 REVERSIBLE TOLL LANE PROJECT

Last week, we reported on Cobb County Chairman Tim Lee’s request that the Transportation Investment Act project list that was unanimously approved by the Regional Roundtable last October (and which is scheduled to be voted on by Metro Atlanta voters on July 31, 2012) be reopened by the General Assembly so that the $689 million currently allocated for a transit connection between Cobb County and MARTA’s Arts Center Station could be reallocated to the I-75/I-575 reversible toll lane project which was postponed by Governor Deal in December.

Legislative leadership indicated that they did not want to open up the project list and the Governor’s Office reiterated that the Governor had merely postponed the I-75/I-575 project and was continuing to look for other ways to fund that project. Last week, the House found another way to fund that project, allocating $300 million in the Amended FY 2012 budget to that project. When combined with the approximately $300 million already allocated to that project by the Georgia Department of Transportation (GDOT) and additional funds freed up by an accounting change (also approved by the House on Friday) that would allow unspent motor fuel tax funds from previous years to be rolled over by GDOT to be used going forward, it appeared that funding for the reversible toll lane project had been achieved. However, some GDOT Board members indicated that the $300 million they had previously allocated was for a public-private partnership project and that a fully public project might be viewed differently.

ETHICS REFORM

HB 889 was introduced last week by Rep. Joe Wilkinson (Chairman of the House Ethics Committee) with the full support of House leadership. The bill would restore the authority of the Georgia Government Transparency and Campaign Finance Commission (formerly known as the State Ethics Commission) to make, interpret and apply rules governing lobbying activities and campaign finance (authority which was taken away when Speaker Glenn Richardson was in power). Speaker of the House David Ralston also indicated that he supported an increase in the budget for the long underfunded state agency. Status: Pending in House Rules Committee.

Other legislation of note

HB 718 – Would create a Georgia Capital Acceleration Fund of up to $200 million (financed by the sale of insurance premium tax credits sold by the state over an initial 3 year period). The fund would be administered by a Georgia Capital Acceleration Authority and used as venture capital for Georgia-based start-up companies. STATUS: Pending in the House Insurance Committee.

HB 48 – Would expand Georgia’s existing freeport tax exemptions to make Georgia more competitive with neighboring states which have no tax on business inventory. STATUS: Passed out of House Ways & Means Committee on February 24, 2011. Passed the full House on March 2, 2011 by a vote of 166-1. Pending in Senate Finance Committee.

HB 705 – Would eliminate the requirement that was imposed on school systems a couple of years ago that 65% of all school system funds must be spent in the classroom. The change was recommended by the K-12 finance commission based on research finding no evidence of the 65% rule having any impact on student achievement (and the reality that at least 40 school systems in Georgiahave already been granted exemptions from the rule). Status: Passed by House Education Committee on January 12^th and pending in House Rules Committee.

HB 713 – Bill will delay until 2013 the implementation of the college and career readiness initiatives that were scheduled to go into effect this fall. These initiatives include requiring some level of career awareness education for students in all grades (K-12) as well as the “career pathways” program in which career focused programs of study in at least 16 defined career areas would be created for all high schools and students would follow a course schedule partially focused on the particular career interest they select beginning in 9^th grade. Department of Education officials indicated that more time was needed to make sure that these programs are implemented in the right way. Status: Passed by House Education Committee on January 12^th and by the full House by a vote of 162-1 on January 24^th. Pending in Senate Education & Youth Committee.

SB 33 – Zero-based budgeting for all state agencies. SB 33, sponsored by Gwinnett’s own Sen. David Shafer (and which already passed the full Senate last year) could be the legislative vehicle to finally bring “zero-base” budgeting to Georgia’s budget process, requiring every state program, agency or department to submit a zero-base budget once every four years. A zero-base budget would require every budget to start at zero and for every line item for a particular program or agency to be justified, rather than the current scenario where the starting point for budget discussions is the previous year’s budget amount and the discussion is how much that amount will be raised or lowered. STATUS: Passed the House (by a 135-38 vote) and Senate (by a 48-1 vote) last year. Pending in House-Senate Conference Committee.

SR 20 – Would place a cap on state spending, with increases limited to the previous year’s budget amount plus inflation and population increase (if any). Any excess revenues would be funneled to the Rainy Day Fund. STATUS: Passed the Senate last February (by a vote of 42-7) and is pending in the House Ways & Means Committee.

SB 223 – “Sunset legislation” bill that would create a “Legislative Sunset Advisory Subcommittee” that would regularly assess all state programs, departments and agencies (each agency would be reviewed at least every 8 years) to determine if they should be consolidated or abolished. STATUS: Passed the House (by a 120-56 vote) and Senate (by a 42-9 vote) last year. Senate Conference Committee version was passed by the Senate on January 30, 2012 by a vote of 37-12.

HR 1162 – A Constitutional amendment to allow for charter schools to be approved by the state over the objection of local school boards. Proposed charter schools would first apply to the local board of education in the jurisdiction in which they are located and if denied, they could then apply to the Georgia Charter Schools Commission for a charter which, if granted, would entitle that school to state and (possibly) local school funding (the question of whether local funds would be included is still under much discussion). This Constitutional amendment is in response to (and would overturn) the May 2011 decision of the Georgia Supreme Court which declared that only local school boards could approve charter schools. STATUS: Passed out of House Education Committee on February 2, 2012. Pending in House Rules Committee.

HB 86 – Would eliminate all state and local sales and use taxes on energy used in manufacturing. Bill could be expanded to include agriculture and mining. STATUS: Introduced last session and still pending in House Ways & Means Committee.

SB 355 – By Sen. Renee Unterman, would require mandatory reporting of child abuse by anyone (other than clergy and attorneys bound by attorney-client privilege) to report evidence of possible child abuse (currently only seven specifically defined types of professionals, such as teachers, are required to report evidence of child abuse). The bill would also extend the statute of limitations on crimes against children to the victim’s 18^th birthday plus 10 years (or plus 15 years, in cases of forcible rape). STATUS: Introduced on January 26, 2012 and pending in Senate Judiciary Committee.

The Week Ahead

The current legislative calendar calls for the General Assembly to be in session Monday through Thursday this week, returning after Valentine’s Day to be in session Wednesday, February 15^th through Friday, February 17^th.