Good Problem for General Assembly – What to Do with Surplus

Dave Williams

Wednesday, January 10th, 2024

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The 2024 session of the General Assembly starting Monday is expected to feature renewed debate over issues lawmakers have wrestled with for years, including private school vouchers, legalized gambling, and tort reform.

What’s different this year is that Georgia is sitting atop a $16 billion budget surplus and another $11 billion undesignated funds. What to do with that unprecedented pile of cash likely will dominate the 40 days under the Gold Dome.

“The state has the chance to make a real difference in the lives of Georgians by investing in critical areas such as child care, education, and workforce development,” said Danny Kanso, senior fiscal analyst with the left-leaning Georgia Budget and Policy Institute. “We have the resources to make historic investments that will benefit all Georgians for generations to come.”

However, the legislature’s Republican majorities aren’t likely to abandon a long-running reputation for fiscal frugality to satisfy state agencies and interest groups with long lists of uses for tax dollars.

“The world is full of ideas for spending other people’s money,” said Senate Appropriations Committee Chairman Blake Tillery, R-Vidalia.

On the other hand, Tillery acknowledged the toll inflation has taken on core government services.

“We’re probably going to have to spend more to do what the government needs to do,” he said.

Gov. Brian Kemp already has identified some of his spending priorities. Early last month, the Republican governor announced he will ask the General Assembly to accelerate the state income tax cut the legislature approved two years ago.

The measure, which took effect at the beginning of this month, reduces the tax rate from 5.75% to 5.49%. Kemp is proposing to lower that rate further to 5.39%, a level that barring new legislation would not kick in until next year.

Kemp also will ask lawmakers for funding to provide one-time pay supplements of $1,000 for each of about 112,000 state employees and 196,000 teachers and school support staff, and to send $45,000 to every public school in Georgia to strengthen campus security.

Meanwhile, GOP legislative leaders are expected to mount another bid in their perennial fight to get private school vouchers through the General Assembly.

Last year, the Senate passed a bill to provide Georgia students in low-performing schools $6,000 scholarships to pay for private school or certain other educational costs. But the legislation failed in the House on the final day of the 2023 session when a group of rural Republicans joined minority Democrats opposed to diverting funds from public schools in voting against it.

The rural Republicans objected to the bill because there aren’t enough private schools in rural counties to make vouchers viable in those areas.

“We keep hearing, ‘school choice, school choice, school choice,’ ” said Lisa Morgan, president of the Georgia Association of Educators. “For the vast majority of Georgians living outside the metropolitan area, that’s not an option. … It’s disingenuous to say any voucher bill would benefit those students.”

Kemp signaled last summer during a speech at a Georgia Chamber of Commerce-sponsored event that tort reform would be one of his top priorities for the 2024 General Assembly session.

One of the first things Republicans did in 2005 when the GOP took control of both legislative chambers for the first time in modern history was pass a bill setting a $350,000 cap on non-economic damages in lawsuits. But the state Supreme Court overturned the law in 2010. 

“The cost of defending itself against one bogus lawsuit could be enough to put a small business out of business,” said Hunter Loggins, director of the Georgia chapter of the National Federation for Independent Business.

Legislative Democrats have long blocked major tort reform initiatives in the legislature, arguing changes to the system would strip away the rights of victims of car crashes and medical malpractice to their day in court.

Another issue lawmakers debate virtually every year but have yet to act on is legalized gambling. Of several forms of gambling that have been proposed, supporters say sports betting should be the easiest to pass because it could be done without amending Georgia’s Constitution, which requires two-thirds votes of the House and Senate.

But not everyone buys that legal argument. State Sen. Brandon Beach, R-Alpharetta, said he will introduce a constitutional amendment early in the session to legalize not only sports betting but casino gambling and pari-mutuel betting on horse racing.

If it passes, the amendment would land on the statewide ballot in November for Georgia voters to decide.

Beach said half of the state’s share of revenue from legalized gambling under his proposal would go to infrastructure spending, including highway and bridge improvements. Last month, Georgia Commissioner of Transportation Russell McMurry warned the state needs a significant boost in transportation funding during the coming decades to keep people and freight moving on highways that otherwise will becoming increasingly congested.

“They can’t spend the money on salaries or new F150 trucks,” Beach said of his legislation.

Beach said the rest of the state’s share of funding from legalized gambling would be divided between mental health care, rural health care, and chronically underfunded Historically Black Colleges and Universities (HBCUs).

Legislative Republicans also are expected to renew efforts to repeal or at least streamline the state’s Certificate of Need (CON) law governing hospital construction. After years of failure on the CON front, GOP leaders have signaled a willingness to talk about expanding Medicaid coverage in Georgia – a longstanding priority for Democrats – in exchange for CON reform.

Under a Medicaid expansion model adopted in heavily Republican Arkansas, individuals with incomes up to 138% of the federal poverty line are eligible for coverage. Georgia Pathways, the limited Medicaid expansion that took effect in Georgia last summer, sets the income limit at 100% of the poverty line.

“If we’re going to have conversations about significant CON changes, we need to have conversations about how we’re going to get people access to health care,” said Anna Adams, executive vice president of external affairs at the Georgia Hospital Association. “There’s going to be conversations about both.”