Sen. Chance Honored by Metro Atlanta Chamber for Enhancing State’s Economic Development

Sen. Ronnie Chance (R-Tyrone) has been honored by the Metro Atlanta Chamber (MAC) for his efforts to cultivate a stronger economic climate in Georgia. He was recognized by Richard F. (Rick) Smith, chairman and CEO of Equifax Inc. and 2009 Metro Atlanta Chamber chairman at the board meeting earlier this month.

“As Georgia families, businesses, and local governments continue to face financial hardship, the legislature is constantly exploring solutions to enhance our economic climate in order to bring jobs, revenue and sustainability to our state,” said Chance. “Through our partnership with the Metro Atlanta Chamber, we can position Georgia to emerge from this downturn as the economic engine of the South. I am honored to be recognized by this outstanding organization, and I look forward to working with them in continuing to move our state forward.”

Sen. Chance was named chairman of the Senate Finance Committee during the 2009 Legislative Session, where he sponsored legislation to update language to the Business Expansion Support (BEST) Act to expand eligibility for businesses that previously would not have qualified. NCR's decision to relocate their headquarters to Georgia in June was partially based on this legislation. The move by the ATM manufacturer resulted in creating over 2,000 jobs in the state.

Sen. Chip Pearson (R-Dawsonville), who serves as the Senate Economic Development Committee chairman, was also recognized for his efforts in enhancing economic development and helping pass the legislation to update the BEST Act.

Upon recognizing Sen. Chance, MAC Chairman Smith remarked, “Your outstanding contributions have certainly promoted economic development in metro Atlanta and Georgia.”
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Notes from the Senate by Senator Ronnie Chance, 16th District

Furloughs Won't Affect Retirement

When furloughs for state employees became widespread this year, one of the questions raised was how that reduction might affect those nearing retirement. The retirement benefit for teachers and state employees is based on a calculation of the average of the two highest years of salary, which are typically the last two years but do not have to be.

The question became whether furloughs, and the resulting reduction in salary, reduce the average pay and therefore reduce the retirement benefits that employees are locked in on for the entirety of their retirement.

Based on the advice of the Attorney General and his interpretation of the law, retirement officials have ruled that furloughs will not affect an employee's retirement calculation. The answer lies in the definition of "salary." A furlough does not count as a reduction in salary so the calculation of an employee's two highest years of salary is not changed due to a furlough.

Conversely, a pay cut, or reduction in pay, would in fact constitute a reduction in salary and would reduce the average for anyone within the two year calculation window. If an agency or school system actually reduces the pay or contracted time of employees or teachers, this would be a permanent change and would affect the two year calculation if the final years are the highest years of salary.

AUGUST REVENUES--HARD TO FIND A SIGN BUT LOOKING ANYWAY

August revenue figures don't show much relief until you consider the $132 million in tax refunds included in the state pay-outs for the month.

Total revenues were down 16.4% for the month. August, like July, is a relatively low revenue month and this August was no exception coming in at $1.052 billion for the month.

Individual Income tax collections were off by 20.8%, totaling only $505.9 million or down by $132 million, exactly the same amount reported to have been paid out in income tax refunds. If that is correct, then Individual Income Taxes were even with last year for the month.

Total Sales tax collections were down by 12.6%, with local and state collections down by about 12.5% each. The state collected only $402.9 million in sales taxes in August.

Corporate Income Taxes fluctuate during a particular quarter, but in August were flat at a minus 1%. Georgia took in only $17 million in corporate income taxes in August.

Fuel taxes continued to reflect the lower gasoline price of this year, with total collections down by 13.1%. Actually excise taxes, by the gallon, were slightly up at plus 2.8%, but sales tax collections, based on a lower retail price compared to a year ago, were down by 27%. The state collected about $65 million in fuel taxes in August.

Georgia collected about $60 million in other taxes and fees in August.
Year to Date-July and August

Two months into the year, the state has collected a total of $2.1 billion in total revenues. Compared to July-August of 2008, this is some $324 million less than the same two months last year. Of course this includes $166 million, the two month total of tax refunds paid out. So the actual normal comparable difference is about -$160 million.

YTD, Individual Income Taxes are down $180 million, about -20%. Taking off the refunds, the total collections are down only $32 million. Saying this, though, does not change the shortfall amount the state is working towards, some $900 million.

YTD, local sales tax collections are off by 17.8% and the state portion by -11%. Corporate collections after two months are up 3.8%.

Fuel tax collections are down 15% with excise taxes actually positive by 4.1% but sales taxes for reasons mentioned earlier are off by 32.6%. The small increase in taxes by the gallon may be explained by more driving vacations with cheaper fuel this year.

A Winding Road Ahead

The next three months are challenging when compared to revenue collections from 2008. Those totals, Sept. $1.6 billion, Oct. $1.4 billion and Nov. $1.4 billion will be difficult to match unless substantial improvements in economic activity occur.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.
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July 1 Brings New Laws

A number of new laws go into effect July 1 and here is a brief review.

SB 14 - Prohibits Superintendent or School Board Members from serving with an immediate family member as principal, assistant principal or central staff.

HB 149 - Allows high school juniors and seniors to attend college and receive high school credit. ("Move on When Ready")

HB 243 - Sunsets National Board Certification program, grandfathers in those already awarded or in pipeline

HB 193 - Allows local school boards to use total hours instead of total days in meeting the 180 day mandatory attendance.

HB 280 - Increases step pay for beginning and existing science and math teachers.

HB 86 - Requires proof of citizenship in registering to vote

HB 228 - Creates new department of Behavioral Health and moves Public Health to Dept. of Community Health

SB 196 - Creates a misdemeanor when a driver has a collision caused by a right of way violation involving bicycles, motorcyclists

HB 160 - Increased driver's license reinstatement fees, but "Super Speeder" provisions begin Jan. 1, 2010.

EDUCATION FUNDING HURTS SOME MORE THAN OTHERS - FORMULA DRIVEN K-12 EDUCATION AND HIGHER EDUCATION GROW DESPITE BUDGET CUTS--GAINS FOR GROWING SYSTEMS

Although education makes up a large part of the state budget, the cuts to K-12 education have been significantly less than cuts to other agencies. Fast growing systems have been the main recipient of the new funds.

Enrollment in K-12 education has continued to increase as Georgia's population has grown. Since 2001, Georgia's K-12 student population has grown by 14%, or 200,000 students, while K-12 funding has grown by 38%. In FY10, K-12 education overall makes up about 40% of the state funds in the budget. The FY10 budget appropriates $7.39 billion in state funds to the Department of Education, in addition to $413.1 million in federal stimulus budget stabilization funds. State funds appropriated to the Department of Education over the past five years are as follows:

FY06, $6.61 billion
FY07, $7.39 billion
FY08, $7.97 billion
FY09, $7.99 billion
FY10, $7.97 billion (including federal budget stabilization funds.)

So, in the last five years, funds going to K-12 have increased by $1.3 billion. In total, in FY10, the Department of Education and its component programs only received a 3% or $211 million cut from the original FY09 budget which would have funded Education at $8.2 billion and presumed that revenues would grow rather than shrink. By way of comparison, cuts to other agencies in the state averaged 11% below the original FY09 budget, not including statewide cuts such as withholding staff pay raises.

K-12 programs have also seen a substantial increase in funding from the federal government through the stimulus bill funding for Title I programs for disadvantaged students and funding for students with special needs. An additional $650 million will go directly to school systems for these programs in FY10.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.
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Senate Update: I Haven't Recieved My Refund

Some have noted that they are experiencing delays this year in the receipt of refunds or even in the state cashing their payments. Georgians have the option to file their state tax returns either electronically (over the internet) or using traditional paper forms. When returns are filed electronically, they do not need to be physically opened, nor do they require data entry. For this reason, the time required to process and to issue refunds for returns filed electronically has stayed consistent - and quick - at 6 to 10 days. While the processing of electronic claims has stayed the same, working through this year's paper claims is taking longer.

In prior years, the Department of Revenue would process a paper return in 4 to 10 weeks. However, recent budget cuts have increased the time taken to process paper returns. In the amended FY09 budget, the state had to find around $2 billion in cuts because of the economic downturn and agencies were asked to submit proposals to reduce spending. The Department of Revenue proposed to reduce its budget by $2.4 million by eliminating two shifts of temporary workers that were used to process paper claims.

At the same time that capacity dropped, the number of claims filed has stayed roughly consistent. So, with an equal workload and less capacity, a backlog has developed. The date that a return was filed has a direct effect on when citizens can expect to receive their return. It is a given that everyone is more anxious to receive their refund this year because of the economy.

According to the Revenue Department, here are the turnaround times for paper returns based on the date the Department received them:

Prior to April 1st - 10 to 12 weeks
April 1st to 10th - 12 to 14 weeks
After April 10th - 14 to 20 weeks

MORE INSIGHT ON GEORGIA'S STATE REVENUE

INDIVIDUAL INCOME TAXES - "Incoming is down, Outgoing is Up"

Individual Income Taxes - In the 2009 Fiscal Year, only two months, September and November exceeded the previous years same month, and only by about $30 million each.

The other eight months total a decline of some $884 million in FY09 under FY08.

Individual Income Taxes are 50% of state revenues. Some categories making huge decreases were Estimated Payments - $353 million or 28.6% and individual returns down $177 million or 25.6%.

Conversely, refunds to individuals are up $71 million but only 3.8%. Individual income tax payments to the state are down by $145 million and refunds are up on over 200,000 returns totaling $70 million.

SALES TAXES

Sales tax revenues have declined 8.31% YTD. This is a shade better than the 9.83% that Individual Income Taxes have declined YTD.

The distribution to local governments has declined about the same amount as the overall decline, -7.8% which is somewhat of a surprise, because it shows that local sales tax revenues are declining at approximately the same rate as state sales taxes.

Within categories, home furnishings were up in May by about 9% and manufacturing sales tax collections were up about 10% for May. Automotive sales taxes were down 44% over May of 2008.

Motor Fuel continues to lag, down by 13.7% combined, with the drop in fuel prices decreasing the sales taxes by 19%. Additionally, usage by the gallon continues to decrease excise tax collections some 7.4% YTD.

Corporate Income Taxes are off 26.7%. Refunds are up 54.5%, estimated payments down 20%, S Corp income taxes down 36% but assessments were up 289% or $47 million.

Whether there are green shoots of recovery sprouting or just more weeds due to the rain is debatable.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.
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June 8th Notes from the Senate

By Senator Ronnie Chance,
16th District

MAY REVENUES OFFER NO RELIEF

Maybe it was a little anticlimactic since the Governor lowered the Revenue Estimate at the end of May and assessed agencies 25% of the June allotments, but the May revenues are in and while certainly not positive, are actually about 6% under the worse case scenario envisioned a week ago.

Revenues for the month of May were down 14.4% overall or some $211.7 million down from May of 2008. Individual income tax collections were down 21.2% continuing a consistent negative trend. May Sales taxes were down overall $181 million or 20.2%. Of that, local sales tax collections were down $173 million, so most of the loss occurred in local collections. Motor fuel taxes were down an additional $23 million for both excise and sales taxes. Corporate income taxes were down about $10 million.

So, Year-To-Date figures continue to disappoint and cause that sinking feeling. Overall, revenues are down over 10% or $1.5 billion dollars for the first 11 months. Individual income taxes are down 11.0% or $884 million. Sales taxes are down overall $780 million or 8.0% of which the state portion is -$404 million or -7.6%. Motor fuel taxes are down collectively $126.8 million or -13.7%. Corporate income taxes are down $211 million or -26.7%.

The state has now used up about $300 million of the $562 million in the Shortfall Reserve Fund with a month to go.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.

Sen. Ronnie Chance, Feb. 24th Update

This week, the Georgia General Assembly reached the 20th Legislative Day, which marks the halfway point of the 2009 Legislative Session. The Legislature has been working hard to ease the problems caused by the global economic crisis, and thus far the Senate, House, and Governor are all working together. A good example of this is the Homeowner Tax Relief Grants (HTRG).

Early this session, the Governor proposed the elimination of funding for the HTRG because of budget concerns. The money for these grants was approved last year, and local governments had already factored them into their bills. Had the legislature not acted, many citizens across Georgia would have received an additional property tax bill for several hundred dollars.

However, I am pleased to report that we have successfully saved the grants. The House and Senate, acting quickly, passed legislation that the Governor has already signed to ensure funding for these grants will occur. It was very important to secure these grants in these difficult economic times.

Below are a few updates on bills moving through the legislature:

An Effort to Create Jobs for Georgians

This week, Republican Leadership in the Georgia General Assembly continued work on a package to stimulate the economy through the private sector. The "Jobs, Opportunity, and Business Success Act of 2009" will provide tax incentives to create real, long-term jobs in Georgia.

The bill includes the following:

$500 credit towards the unemployment insurance tax for each eligible employee hired.
$2,400 Income tax credit for each eligible employee hired. This credit will be available to those who hire an employee that has been unemployed for at least 60 days and remains employed for at least 24 months at a rate above the average weekly rate of unemployment benefits as determined by the DOL.

Start a "new business" holiday. This component would create a one year "holiday" on new filings for LLC's, Limited Partnerships and For Profit Companies.

Elimination of the State Inventory Tax on all Georgia businesses.

Elimination of the Sales Tax Deposit.

Gradual elimination of the Corporate Income Tax. This is a gradual elimination of the Corporate Income tax beginning in 2012 and phased over 12 years. Beginning in 2012, the tax rate will be reduced by .5% each year over 12 years. We are avoiding short-term revenue loss to the state while signaling a pro-business, pro-jobs plan for the future.

Senate Votes to Strength Food Safety in Georgia

The Senate passed Senate Bill 80, which imposes stricter guidelines on food testing for processing plants in response to the nationwide salmonella outbreak that was linked to a South Georgia peanut butter plant.

The legislation requires that food processing facilities report suspicions of contaminated food, food testing and retention of testing results to the Department of Agriculture. This bill provides the Department access to any food processor's testing records for the presence of contaminants.

The Commissioner of Agriculture is also directed to establish requirements for regular food testing. Processors are to report positive finds of contaminates within one business day of the discovery directly to the state. The bill also gives the Commissioner the right to test any food if there are reasonable grounds to suspect contamination.

SR 1: The "Taxpayer Protection Amendment"

This measure passed by the Senate would require any additional state revenue collected in future years to be appropriated in the Amended Budget in the following priority: 1. Satisfying the state's student enrollment increases; 2. Funding of the Revenue Shortfall Reserve until the fund reaches 10 percent of the previous year's budget.; 3. Any remaining surplus would be put towards outstanding debt and/or providing taxpayer relief. If passed and signed by the Governor, the resolution would go before voters as a proposed constitutional amendment on the November 2010 ballot before becoming law.

Illegal Aliens in Georgia Prisons

The Senate Veterans, Military and Homeland Security Committee passed SB 136 which decreases the costs and expenses of operating state prisons by deporting many of the illegal aliens in our prison system. SB 136 requires the Department of Corrections and the State Board of Pardons and Paroles to participate in the U.S. Immigration and Customs Enforcement Rapid Removal of Eligible Parolees Accepted for Transfer (REPAT) Program. In an effort to crack down on the increasing population of illegal immigrants living in Georgia, the bill expedites the deportation process of aliens incarcerated or eligible for parole. Aliens who participate in this program would waive any right to appeal their conviction and would be required to serve the remainder of their prison term without parole if they are caught in Georgia illegally again.

Thank you for your interest. Please contact me if I may be of assistance at (404) 463-1366 or at ronnie.chance@senate.ga.gov.
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