Monday, April 11, 2011

Notes from the Senate, April 10 (Sen. Chance, Georgia)


This past week the Senate approved its version of the FY2012 Budget, by a vote of 47-4. This concludes the Senate stage of the process, and the bill will now go to conference committee for finalization.

The Senate FY2012 Budget focuses on enhancing customer service by moving funds to the Department of Revenue's customer service department and the licensing section of the Secretary of State's Office.. Additionally, the Senate proposal adds more agencies to "shared services," which includes combined payroll and other services for greater efficiency.

The State Health Benefit Plan's $270 million shortfall is being partially addressed through shorting the State's Medicaid fund. To help meet the overall shortfall, the Senate is proposing to add new auditors and investigators to the Department of Revenue who are estimated to be able to collect $100 million or more in taxes due the state.

The Conference committee of the House and Senate has been working to resolve differences between their versions over the past week.


The legislature has three legislative days remaining before the end of session. During this time we will continue to work diligently on passing the tax reform bill. Our tax code has not been modified since the 1930's and I don't have to tell you that much has changed in past 80 years. Now is the time for this reform and we simply cannot afford to wait another year to enact this reform.

This legislation has been much debated with many moving parts. But it is essential to understand that the proposal we are considering combines many components that have been vetted over many months and the final product will have to be a net benefit to the taxpayers of Georgia.

It is our responsibility to achieve the proper balance to stimulate future economic growth and to bring jobs to Georgia. We take this process very seriously and are working meticulously to fine tune the proposal. We asked how it would affect our state budget, which still requires cuts to carefully balance. We consulted with financial experts as to how the changes would affect each group of Georgia taxpayers. We looked at our neighbors to the north and south to find the strengths and weakness that exist in their current tax systems.

Countless hours of thought and study has gone into this vital issue. We know that lasting change must come from the General Assembly this year. The final outcome will move us closer to a modernized tax system that will benefit Georgians now and in the future. Through the priorities set forth in our state's budget and our Tax Reform legislation, we are continuing to prepare Georgia for competitive business, increased jobs, and economic growth.

One of the most important job-creating aspects of this bill is the elimination of the sales tax on energy used in manufacturing. Manufacturers are among the largest users of electricity and natural gas. By eliminating the energy tax we instantly make Georgia more attractive to these industries and help Georgia's manufacturing community sustain and create jobs.

This proposal as it is currently written also flattens the personal income tax rate-lowering it from 6% to 4.6%. This reduction allows us to be more competitive with our neighboring states, which have little or no income tax. To offset the reduction to the state income tax and elimination of the energy tax, the bill broadens consumption taxes through the implementation of a communication services tax, which ultimately establishes market parity.

This is a proposal that cuts income taxes on Georgians by nearly $200 million. Although some people believe that Georgia should be raising revenues in this economy, I believe that leaving that $200 million in the hands of the consumers is economic stimulus at its best. We are committed to achieving tax reform that will benefit all Georgians and we will continue working with our colleagues in the House to reach a final compromise.


The latest version of the bill aimed at combating illegal immigration, HB 87, has undergone a number of changes by committees in both the House and Senate. The focal point, however, remains a provision requiring contractors doing business with state or local governments to use the federal work authorization program, commonly referred to as E-Verify. The main impetus for this came from public pressure following a few high-profile instances where illegal aliens were found to be working on public works projects. Additionally, the bill would eventually require private employers with five or more employees to use E-Verify for new hires, and would make an intentional violation a misdemeanor.

One fairly consistent feature has been a provision that allows law enforcement to check immigration status if an officer has probable cause to believe that someone has committed a crime. The idea, of course, is that more active enforcement of immigration law by local authorities will help expedite the process of detaining and handing over suspects who may be in the U.S. illegally to federal authorities. This was a feature loosely drawn from Arizona's recently passed law, and has been a staple of most of the legislative proposals to this point.

During the next three legislative days, we hope to fine tune the bill and pass a measure that will strongly address this ever growing problem in Georgia.


State revenues grew at a 10.7% rate in March continuing a very encouraging trend. Total revenues for the month totaled $1.1 billion with an increase of $107 million.

Sales tax collections for the state increased 16.4% or an increase of $58.3 million on sales tax collections of $413.1 million for March.

Motor Fuel tax collections in total were up 6.5% or $4.5 million, but higher prices began to push down consumption as the excise tax, based on per gallon, fell 1.3%.

The third month of the quarter showed an increase in corporate income taxes of $43 million or 32.6%. For the year, corporate taxes are up 12.3% or $53.1 million, hopefully an indication of businesses' profitability recovering..

Year to date, there are encouraging signs with total revenue up 9.4% or $959.9 million on total revenue of $11.2 billion after 9 months of the fiscal year.


The legislature is tentatively planning to convene on August 15th for this year's special session to redraw State House and State Senate district lines, as well as Congressional district lines. The General Assembly is required by law to redraw these districts every 10 years based upon census numbers. As we move closer to August's special session, we'll have more updates on this process.

If you would like additional information regarding a specific piece of legislation, you may access the Georgia General Assembly website at

Thank you for your interest. Please contact me if I may be of assistance at:
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Atlanta, Georgia 30334
(404) 651-7738
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