The Blog

June Policy Snapshot

Posted on June 26, 2015

By: Kyle Hayes

Although the legislature is not in session, policymakers across the state are hard at work dealing with the important problems and preparing for next session. Over the summer we’ll deliver monthly policy updates to keep you informed on the latest in Georgia’s policy debates. Here’s June’s top 5:

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*Update*: Friday morning saw another historic victory for civil rights as the Supreme Court ruled 5-4 that same-sex couples have the right to marry in all 50 states and also have the right to have those marriages recognized by all other states.  The decision allows U.S. law to catch up to public opinion amongst a majority of Americans as 55 percent now believe that the rights afforded to traditional marriages should also be extended to same sex couples. Georgia Attorney General Sam Olens confirmed that Georgia would comply with the Court’s ruling, saying “Once the Supreme Court has ruled, its Order is the law of the land.”

1.  Education Reform Committee Delays Report

Last month, Georgia’s Education Reform Commission requested approval for a delay in the study committee’s findings to issue a reform proposal. The Committee is working this summer to formulate a plan to reform the state’s education funding formula and address other issues. The delay is grounded in a debate within the committee about how to succeed where other groups have failed in proposing reforms that provide adequate funding per student.

The committee has also been extensively studying the status of charter schools in the state. The School Choice Subcommittee reviewed a report from the National Alliance for Public Charter Schools which criticized Georgia’ charter law for not having adequate autonomy for Charter schools and a lack of statutory provisions to govern the expansion of charter schools.

2. Georgia Department of Human Services to seek Federal Medicaid Waiver

DHS is expected to seek a waiver to solicit federal funds to test a new “Hub and Spoke” hospital model. The move is expected to provide some relief to struggling rural hospitals, but falls short of the potential benefits of Medicaid expansion.

Some legislators pushed back on the Department’s move, citing a letter from Attorney General Sam Olens’ Counsel which stated that it was not constitutional for the legislature to give DHS the authority to solicit Section 1115 approval in the annual budget bill. DHS director Clyde Reese has said he believes he has the authority to seek the waiver, but final action on federal Medicaid funding may be delayed until the 2016 legislative session.

3. Supreme Court Rules in Favor of the Affordable Care Act, Maintains Subsidies in Georgia and Other States

On Thursday, the Supreme Court ruled in favor of the Affordable Care Act in a challenge to the legality of subsidies for the purchase of health insurance in Georgia and some other states. The plaintiffs claimed that the law’s specific text prohibited the federal government from paying subsidies to consumers who shop on Marketplaces established by the federal government. However the Court disagreed, saying that the law requires three parts to be successful, and that Congress did not intend for one part (the subsidies) to only apply to some states.

A ruling against the ACA would have taken away subsidies from 412,000 Georgians who have purchased insurance plans through the federal exchange and increase the bill of each consumer by an average of $274 per month.

4. Georgia to Add $10 million in Spending for Truck Safety

The state will spend an additional $10 million to hire new officers to patrol areas of Georgia heavily congested with tractor-trailer traffic. The move seeks to increase road safety after two tragic accidents this year. Safety officials said that commercial trucks were involved in 16,518 accidents last year, costing 157 lives.

5. Kansas Strikes Budget Deal That Places Cost for Tax Cuts on the State’s Poorest Residents

In the early days of Kansas Governor Sam Brownback’s term, he signed a tax cut bill that he called a “real-life experiment” in supply-side economics. This legislation reduced tax rates on personal income and business pass-through taxes.

Brownback said these cuts would be like a shot of adrenaline into the Kansas economy. Unfortunately for the Jayhawks, this hasn’t been the case. Since the cuts were enacted, Kansas’ economy has grown slower than the national average. Additionally, the cuts led to a budget deficit, and cuts to shore up the deficit forced some Kansas school districts to close early this year. Kansas’ budget woes also led to a budget showdown between moderate Republicans and Governor Brownback in the longest legislative session in the state’s history

The budget deal that they ultimately reached preserves the income and business tax cuts, but increases the state sales tax to one of the highest rates in the nation. This is important because the sales tax is a tax that disproportionately hurts the poor as they pay a larger percentage of their income than wealthy people.

The lessons of Kansas are important as Georgia is expected to pursue tax reform legislation in 2015. Last year’s transportation funding bill included a provision creating a tax reform commission to propose a tax plan. The commission’s proposal is required to bypass the committee process in the House and the Senate and is prohibited from being amended on the floor. Members will only be allowed a yea or nay vote on the commission’s proposal. Policymakers should heed the warning of Kansas’ experience with drastic tax reforms.

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