Revenues are up!

July state revenues were up 4.7% for the month and it is hard to portray this as anything but good news. Unless there is an unknown amount of income tax refunds laying in wait, this is a solid month of growth at $1.147 billion in revenues, or about the 2006 level.

Individual Income taxes came in at $540.6 million or up 3.6%. Sales taxes in total were up 3.0% or $818.5 million. Local Sales tax distribution was off by
-5.1% but state net sales taxes were up 2.4% or a total of $454.9 million for the month.

Motor Fuel taxes were encouraging as well. Total collections were up $16.1 million or 24.8% with fuel sales taxes increasing $12.6 million or 47.2% and excise taxes up 9.2% or $3.5 million.

Corporate income taxes had a good month, up $5.5 million or 40.2% but tobacco tax collections were off $3.2 million or -26.0%. Alcohol tax collections were down slightly at -1.0%.

So, Fiscal Year 2011 is off to a good start. It is our hope that the state has turned a corner ever so slightly as the unemployment rate also improved slightly this past month. Georgia's $17.8 billion dollar budget only needs another $16.8 billion in the next 11 months to make budget.

LOTTERY REVENUES AND THE HOPE SCHOLARSHIP

Much has been written in the press recently concerning the lottery funded HOPE Scholarship, and legislative committees are beginning to consider the fact that lottery funding is essentially flat and the costs of lottery funded programs including the HOPE scholarship is growing. While there is a robust reserve approaching $1 billion, the deficit will increase dramatically over the next few years according to the Georgia Student Finance Commission.

Over the next weeks, this column will examine these issues as well - considering the operation of the lottery and the entire range of programs funded by the lottery. It is important, though, to understand the entirety of the lottery expenditures before considering reducing HOPE or making any changes. Additionally, understanding what the standards are for each program is revealing.

Here are the major lottery funded programs and their status as to how they are earned.

Program Appropriated Percent Means Test Merit Based
HOPE - Public Colleges $474.5 million 42.1% No Yes
HOPE - Private Colleges - $ 59.3 million 5.3% No Yes
HOPE- Technical Colleges $206.3 million 18.3% No No
Grants
Pre-K Program $355.0 million 31.5% No

There are about 2.8% of other scholarships including Engineering, GMC, Accel and the College Opportunity Grant in addition to the 1% Student Finance gets for the administering of HOPE.

So the HOPE Scholarship only accounts for half of the Lottery expenditures. The legislature must evaluate all lottery funded programs the way we are evaluating the HOPE Scholarship.

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.

Last Day for Early Voting

Today is the last chance to take advantage of Early Voting. The 2010 Republican Primary General Election has come and gone, but there are few races still yet to be decided. A few important races are in the middle of runoffs, which will be decided this Tuesday, August 10th. I encourage you to not only go to the polls and vote, but to take advantage of Early Voting and avoid the congestion of Election Day. Please see below details on Early Voting for your county.

One of the important elections involves one of my good friends and former Senate colleague Senator John Douglas who is running for Public Service Commissioner. I hope you will take the time to visit both his campaign website and his Senate website to learn more about John Douglas and his candidacy. I have served with John in the Georgia State Senate and am proud to endorse his candidacy. Senator Douglas and I served together since 2004, and I know firsthand his work ethic, integrity and his values. He will make an outstanding Public Service Commissioner.

On Aug. 10th we have important decisions to make, and we must elect proven Conservative leaders we can trust. John Douglas is that type of leader, and I hope you will consider supporting him as you cast your ballot in the Republican Primary Runoff Election.

EARLY VOTING DETAILS:

Fayette County
08/02/2010 to 08/6/2010
Days: Monday through Friday
8:00AM - 5:00 PM

Fayette County Administration Complex
140 Stonewall Avenue West, Suite 209
Fayetteville, GA

Peachtree City Library
201 Willow Bend Road
Peachtree City, GA

Tyrone Public Library
143 Commerce Drive
Tyrone, GA

Lamar County
08/02/2010 to 08/6/2010
Days: Monday through Friday
8:30AM - 12:30 PM & 1:30PM - 5:00 PM

Lamar County Board of Elections and Registration Office
408 Thomaston Street, Suite D (second floor)
Barnesville, GA

Monroe County
08/02/2010 to 08/6/2010
Days: Monday through Friday
8:30AM - 4:30 PM

Board of Registrars Office
550 North Lee Street
Forsyth, GA

Pike County
08/02/2010 to 08/6/2010
Days: Monday through Friday
8:00AM - 5:00 PM

Pike County Registrars Office
16001 Barnesville Street
Zebulon, GA

Spalding County
08/02/2010 to 08/6/2010
Days: Monday through Friday
8:00AM-5:00 PM

Memorial Drive Plaza
819 Memorial Drive
Griffin, GA

Please take the time to view John Douglas's website.

PUBLIC SERVICE COMMISSIONER
John Douglas
http://www.senatorjohndouglas.com/
http://www.votejohndouglas.com


Thank you for your continued support. Please contact me if I may be of assistance at (770) 969 - 9155 or at ronnie@chanceforsenate.com.

Notes from the Senate by Sen Ronnie Chance, 16th District

A reflection on the events at the end of the FY2010 shows effects into FY2011 and FY2012 as well. What this means is that the state's economy, while marginally improving, has not shown any signs of growth meeting the predictions as represented by the revenue estimate in FY2010 and therefore presents serious problems in the FY2011 Amended and FY2012 budgets as well. This spring state revenues were supposed to level out and equal the level of a year ago and set the stage for growth in FY2011. That has not happened.

Despite the revised revenue estimate during the Session, the state was short in cash by some $128 million at the end of the fiscal year in June. Meeting this shortfall has ramifications for FY2011. The Governor's announcement of a 4% withholding of allotments to state agencies (excluding K-12 ed.) is probably only the start of budget cuts in this fiscal year.

There are three separate but interrelated budget events:

The 2010 shortfall and how that was met
Issues with the FY2011 budget just begun in July
The writing of the FY2012 budget and the political and budgetary issues
The state has taken actions to squeak through the year's end. There appears to be a cash shortfall of $125 million or so; however, there are potential accounting actions that may help cover this deficit. Among the actions taken to meet the shortfall were: the state withheld year-end allotments and stopped non-critical purchases and moved Federal Stimulus Funds from the FY2011 budget in K-12 and Regents.

FY 2011 Issues

The $37 million in AARA funds moved from FY11 creates a hole because those funds were counted in the FY2011 budget.

The issue you have read about is the Federal Medicaid match differential, (FMAP). When the recession started, the federal government, as part of its efforts to assist states with budget problems, increased the federal match percentage for Medicaid from 60% to 75% which saved Georgia hundreds of millions of dollars. It also insured that states like Georgia would not cut Medicaid benefits to save money. That enhanced match runs out in December and if not renewed by Congress creates a $370 million hole in the budget we are in right now, FY11. This issue was mentioned in the Governor's 4% agency cut announced recently.

For the second year in a row, there is an unknown amount of state income tax refunds that have been pushed into July and August. That pay-out will affect the revenue picture in FY11. Last year the total was reported at about $160 million. If the amount still to be paid to Ga. taxpayers exceeds $160 million, then there is an additional hole created in FY11 compared to last year.

When a number of factors are considered, the amount of tax growth in state revenues built into the FY11 budget totals about 4.24% or over $600 million. Remember, the last months of FY10 were under predictions. If that continues and the very optimistic growth planned in this budget does not materialize, that shortfall could total several hundred million dollars.


While some of these numbers do depend on factors still unknown, the common belief among budget writers is that there is a potential shortfall in the FY11 budget of several hundreds of millions of dollars. Coming on the heels of reductions of 20% or more, this has the potential of seriously reducing state services.

FY2012 Issues

Tax cuts passed as part of the Hospital fee legislation start phasing in FY2012 and start reducing revenues. Removing the ¼ mill of property tax the state presently receives will begin phasing out in FY12 and will cost state coffers $16 million. Eliminating state income taxes for senior citizens also starts phasing out in FY12 and will cost the state $14 million in revenue.

The biggie is that Medicaid match or FMAP extension. If the enhanced match is not passed by Congress, the present day cost to the state is an entire year or about $787 million.

Estimating growth for the next fiscal year will be a huge issue and certainly hard to do in these uncertain times. To use a baseball term, revenue estimators for Georgia are below "the Mendoza line" in batting average for estimating state revenues.

Contributions to state retirement funds will need to increase to keep those funds up. Estimates are that the Employees Retirement System will require employer contributions to increase by $30 million. The Public School Employees Retirement System will need $8.3 million and the Group Term Life Insurance fund may require $15 million but would probably be funded internally. Even in these austere times, Behavioral Health has received over $70 million dollars of new funding during the FY10 and FY11 budgets in response to the state's court actions with the U.S. Justice Department. Recent developments in federal court may result in additional new funds that would be mandated for Georgia's mental hospitals and mental health delivery system.

The GEFA securitization and other one-time sources of funds will dry up in 2012 as well. GEFA alone was $287 million and the remainder could push this well over $300 million.

Also, don't forget that areas such as education, universities and Medicaid are still growing. This could run several hundred million depending on how forecasting proceeds over the next few months.

Post Script:

The FY12 budget is complicated by the fact that presumably there will be no new federal stimulus funds so the state is essentially on its on. Not listed as issues but almost surely to be fiscal issues are the health of the State Health Benefit Plan and Medicaid expenditures. There will be problems in those areas that will have to be solved.

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.

Early Voting Reminder & Endorsements from Sen. Chance

The 2010 Republican Primary General Election is underway as Early Voting has commenced statewide. I encourage each of you to take advantage of Early Voting and avoid the congestion of Election Day on July 20th. Please see below details on Early Voting for your county.

I also hope you will please take the time to visit the campaign websites of two of my former Senate colleagues who are now pursuing statewide office. I have served with both Brian Kemp and John Douglas in the Georgia State Senate and am endorsing their respective candidacies. Secretary of State Kemp has done an outstanding job since his appointment by Governor Perdue in January and deserves a full term in office. Senator Douglas and I served together since 2004, and I know firsthand his work ethic. He will make an outstanding Public Service Commissioner.

I hope you will consider supporting both of these outstanding leaders as you cast your ballot in the Republican Primary.

EARLY VOTING DETAILS:

Fayette County
06/07/2010 to 07/16/2010

Days: Monday through Friday
Fayette County Administration Complex
140 Stonewall Avenue West, Suite 209
Fayetteville, GA
8:00AM - 5:00 PM

Lamar County
06/07/2010 to 07/16/2010

Days: Monday through Friday
Lamar County Board of Elections and Registration Office
408 Thomaston Street, Suite D (second floor)
Barnesville, GA
8:00AM - 5:00 PM

Monroe County
06/04/2010 to 07/09/2010

Days: Monday through Friday
Board of Registrars Office
550 North Lee Street
Forsyth, GA
8:30AM - 4:30 PM

Pike County
06/07/2010 to 07/16/2010

Days: Monday through Friday
Pike County Registrars Office
16001 Barnesville Street
Zebulon, GA
8:00AM - 5:00 PM

Spalding County
06/07/2010 to 07/16/2010

Days: Monday through Friday
Memorial Drive Plaza
819 Memorial Drive
Griffin, GA
8:30AM-5:30 PM

Please take the time to view these websites to learn more about the candidates.

SECRETARY OF STATE
Brian Kemp
http://votebriankemp.com/

PUBLIC SERVICE COMMISSIONER
John Douglas
http://www.senatorjohndouglas.com/

Thank you for your continued support. Please contact me if I may be of assistance at (770) 969 - 9155 or at ronnie@chanceforsenate.com.

Early Voting Reminder from Sen. Chance

The 2010 Republican Primary General Election is underway as Early Voting has commenced statewide. I encourage each of you to take advantage of Early Voting and avoid the congestion of Election Day on July 20th. Please see below details on Early Voting for your county.

I also hope you will please take the time to visit the campaign websites of two of my former Senate colleagues who are now pursuing statewide office. I have served with both Brian Kemp and John Douglas in the Georgia State Senate and am endorsing their respective candidacies. Secretary of State Kemp has done an outstanding job since his appointment by Governor Perdue in January and deserves a full term in office. Senator Douglas and I served together since 2004, and I know firsthand his work ethic. He will make an outstanding Public Service Commissioner.

I hope you will consider supporting both of these outstanding leaders as you cast your ballot in the Republican Primary.

EARLY VOTING DETAILS:

Fayette County
06/07/2010 to 07/16/2010
Days: Monday through Friday
Fayette County Administration Complex
140 Stonewall Avenue West, Suite 209
Fayetteville, GA
8:00AM - 5:00 PM

Lamar County
06/07/2010 to 07/16/2010
Days: Monday through Friday
Lamar County Board of Elections and Registration Office
408 Thomaston Street, Suite D (second floor)
Barnesville, GA
8:00AM - 5:00 PM

Monroe County
06/04/2010 to 07/09/2010
Days: Monday through Friday
Board of Registrars Office
550 North Lee Street
Forsyth, GA
8:30AM - 4:30 PM

Pike County
06/07/2010 to 07/16/2010
Days: Monday through Friday
Pike County Registrars Office
16001 Barnesville Street
Zebulon, GA
8:00AM - 5:00 PM

Spalding County
06/07/2010 to 07/16/2010
Days: Monday through Friday
Memorial Drive Plaza
819 Memorial Drive
Griffin, GA
8:30AM-5:30 PM

Please take the time to view these websites to learn more about the candidates.

SECRETARY OF STATE
Brian Kemp
http://votebriankemp.com/

PUBLIC SERVICE COMMISSIONER
John Douglas
http://www.senatorjohndouglas.com/

Thank you for your continued support. Please contact me if I may be of assistance at (770) 969 - 9155 or at ronnie@chanceforsenate.com.

Governor's Vetoes - From Separation of Powers to Philosophy

Part One

Governor Perdue's vetoes of legislation and of Appropriations line items were yet another message that he intends to be relevant to the end of his term.

Of the 21 pieces of General Legislation he vetoed, all were passed in either body by huge majority votes.  So, legislative intent was clear.  For example, the 13 House bills vetoed passed the House by a total of 1916 yeas to only 158 nays or an average vote of 147 to 12.  Those same bills passed the Senate by 578 to 28 or an average vote of 44 to 2.

The 8 Senate General bills vetoed passed the Senate by a total vote of 357 to 19 or an average vote of 44 to 2.  These same Senate bills passed the House by a total of 1118 to 127 or an average of 139 to 15.

Many states routinely consider veto overrides and in fact some have a regularly scheduled post session just to consider overrides.  This might be the year that that consideration gains momentum.

The Governor divided some vetoes into categories.  The first category is "Indemnification Bills."  He vetoed HB 827 and SB 414 which expanded coverage by the state indemnification policies which pay when certain categories of state or local employees like firemen or policemen are killed or permanently disabled in the line of duty. Both bills broadened the definition of "dependent".  HB 827 added state highway employees killed or injured to the list of eligible occupations covered by indemnification.  SB 414 allowed parents or other close relatives to receive indemnification benefits if the member was unmarried.

 The second category of vetoes was what he termed "Separation of Powers."  The Governor asserted that 4 bills diminished the powers of the Executive branch- SB 1, SB 148, SB 374 and SB 480.

SB 1 - "Zero-Based Budgeting" is a concept that has passed the Senate several times but only passed the House this year.   Basically each area of the budget on a 4 year rotating basis must be rejustified.  The Governor asserted that this legislation "unnecessarily imposes new bureaucracy and restrictions on the Executive Branch."

SB 148 - The Governor objected to the language from HB 236 that was added during the process.  The addition created the "Legislative Sunset Advisory Subcommittee" of the Legislature whose intent would be to review all state regulatory entities to determine their continued existence and provided for automatic elimination if not specifically renewed by the Legislature.  The Governor asserts that the Legislature already has the powers to accomplish this...but of course specific legislation would be subject to the Governor's veto as well.

SB 374 - created a "Legislative Economic Development Council" made up mostly of General Assembly members that would provide direction and oversight to the state's economic development efforts.  The Governor asserted that the powers conveyed in the bill violated the Constitutional separation of powers.

SB 480 - would have created a Council of Economic Advisors to produce the revenue estimate that is the basis of the Governor's budget proposal.  The main difference is that the collaborative estimate would be published and presented to the Speaker and Lt. Governor who would have had appointees to the Council.  The Governor asserted that the power to produce the revenue estimate is rooted in the State Constitution and this bill would infringe on those powers.  Nationally, most states have some sort of collaborative process for producing the revenue estimate.  Georgia hasn't had an accurate estimate in three years or so.

Other vetoes included:

HB 1407 - would have required the Department of Community Health to contract with a single administrator to provide dental services to Medicaid and PeachCare recipients.  The Governor asserted that this bill would circumvent the managed care administration of those programs and possibly raise costs.

HB 1023 - The "Jobs" bill provided tax credits for employment of unemployed persons, tax credits for "Angel Investors" (start-up investors) and reduced the corporate and individual capital gains taxes when the state shortfall reserve reached $1 billion.  The Governor vetoed the bill because he stated that the Tax Reform Commission, due to produce a report this year, would provide better direction.

Next Week:  Part Two plus May Revenues

More info?  Go to www.legis.ga.gov  - you can enter the bill numbers. The last version of the bill reads AP (As passed). 

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.

3/27/10 Notes from the Senate by Sen Ronnie Chance

Friday, March 26, 2010 marked the 30th legislative day of the 2010 Session, otherwise known as "Crossover Day." Crossover is the last legislative day in which a bill can successfully pass through its original house of origin and still be considered by the other Chamber. Of course, legislation can still be amended to other legislation if it deals with the same subject area. Still to be accomplished in the 10 legislative days remaining are the conference and final passage of the FY2010 Amended budget and House and Senate versions of the FY2011 Budget.

Clarifies Where Weapons Can Be Carried

SB 308 provides that driveways and roads near weapons free zones are not automatically prohibited. Allows the Board of Regents and colleges to make rules prohibiting weapons. Provides that a person is guilty of a misdemeanor for carrying a weapon in an unauthorized location if he/she carries a weapon in a: government building; courthouse; jail or prison; any elementary or secondary school (If the school is in a place of worship, these restrictions will apply only during school hours or during school events); any athletic facility during an event for which the Board of Regents of the University System has prohibited carrying weapons; place of worship unless all or designated licensees are permitted by presiding official; state mental health facility; bar, unless permitted by the owner; on the premises of a nuclear power facility; or within 150 feet of any polling place.

Senate Action This Week

The following legislation has passed the Senate:

• SB 373: Requires an employer to disclose employment related information to an investigating law enforcement agency when an investigation is conducted for the purpose of hiring, certifying, or continuing the certification of a peace officer.
• SB 380: Current law grants the Georgia Environmental Facilities Authority's Water Supply Division (WSD) certain powers with respect to the development of reservoirs in the state. This legislation allows WSD to make loans and grants local governments to pay for expanding and increasing the capacity of existing reservoirs.
• SB 385: Under a Homeland Security program, counties who identify prisoners who are illegal aliens qualify for Federal funds for housing. SB 385 would qualify these counties for an enhanced state housing rate of 110%. Subject to appropriations.
• SB 414: Provides that in the case of death or organic brain damage suffered in the line of duty by law enforcement officers, who are not married, parents or siblings are eligible for indemnification benefits.
• SB 418: Requires the State Board of Pharmacy to establish an electronic database of information on controlled substance prescriptions dispensed in this State.
• SB 419: Allows members of the armed services and veterans who have been diagnosed with post traumatic stress disorder to request to have a notation of such diagnosis placed on his or her driver's license.
• SB 421: Increases the ceiling on the Revenue Shortfall Reserve from 10% to 15% of the previous year's net revenue. Will build a larger reserve fund.
• SB 423: Creates a new statute defining the offense of smash and grab burglary, the intentional and without authority entering of a retail establishment with the intent to commit theft. Would become a felony punishable by 2 to 20 years in prison and/or a $100,000 fine.
• SB 447: Requires that state contracts give preference to GA businesses when purchasing materials or choosing contractors and builders, when such preference does not impair on quality and cost considerations.
• SB 454: Allows veterans organizations to sell pull tab games with winnings that are limited to $500.00 per person per 24 hour time period.
• SB 458: Expands the seatbelt law to include pickup trucks while excluding farm vehicles.
• SB 478: Requires the State Accounting Officer to contract for an audit of inadvertent overpayments by state agencies to vendors due to pricing errors, neglected rebates and discounts, miscalculated freight charges, unclaimed refunds, and erroneously paid excise taxes.
• SB 480: Creates the State Council of Economic Advisors composed of five members. The Governor would appoint three members, and the Speaker of the House of Representatives and the President of the Senate one member each. The group would produce the Revenue Estimate which is the basis for the Governor's budget recommendations.
• SB 496: Establishes the HOPE College Opportunity Grant. Students must meet residency requirements, must be Pell Grant recipients, must meet enrollment standards and maintain satisfactory academic progress to be eligible for this grant. Would be a small grant focused on the most needy students. Funded subject to appropriation.
• SB 505: Limits membership on the State Transportation Board to one five-year term.
• SB 512: Authorizes the State Revenue Commissioner to provide for the collection of uncollected sales and use taxes that businesses may otherwise not be obligated to collect and remit. Authorizes the Dept. of Revenue to offer an incentive of higher commission to out of state internet retailers in order for them to begin collecting use taxes.

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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