The 2016 Georgia Legislature: Key Policy Issues

The 2016 session of the Georgia General Assembly will be underway in less than two months, and the legislature returns to the second year of a two-yearterm with elections on the horizon and a large docket of issues to resolve. Qualifying will likely occur during the session. While few seats arecompetitive in the general election, virtually every member of the legislature will be paying attention to the process and looking out for a challenge inthe primary election in their district. This will, of course, shape the policy dynamics of legislative debate.

Functionally, the legislature will continue to have three primary blocks of votes that are fairly similar in size: traditional Republicans, insurgentRepublicans and Democrats. Against this backdrop, the potential for deal-making and negotiation is high, with a strong cooperative leadership style amongthe governor, lieutenant governor and speaker. Additionally, Democrats in both chambers have proven adept at exploiting Republican structural divisions tonegotiate incremental progress on their party’s policy priorities. In short, this is a session that will likely be fast due to the pending electionprocess, but has significant potential for movement on a range of key policy issues.

Appropriations

We continue to see positive news from the state budget, both in terms of short-term cash receipts and the strong long-term credit position of the statethat has resulted from Governor Deal’s conservative approach to financial management. Going into this session, there will be a surplus of funds and it ishighly likely the bulk of that amount will again be pumped into K-12 education funding. Other priorities likely to win funding will be those initiativesthat have strong gubernatorial or leadership support and relatively limited fiscal impact.

Building Efficiency

Multiple pieces of anticipated legislation deal with the ongoing discussion about retrofitting aging, energy-inefficient structures and how that should befunded.

Casino Gaming

There will be a very high-profile debate in Georgia this year about amending the Constitution to allow limited casino gaming in the state, likely to helpsupport the HOPE scholarship. With Georgians increasingly participating in cross-border gaming in neighboring states, there is serious legislative interestin taking this step.

College Affordability

The national debate on tuition increases and student loans is beginning to echo in Georgia. We do not foresee specific legislation on this topic this year,but we anticipate more vigorous debate over the subject than has been seen in years past.

Data Security

A Senate study committee focused this summer on tightening measures to secure data held by state government. It is unclear whether this will result inlegislative or funding recommendations, but it is certain we can anticipate continued focus on improving the state’s underfunded, aging informationtechnology infrastructure to prevent data breaches. Recent news regarding release of Social Security numbers for millions of Georgia voters will likelyincrease focus on this topic.

Education Funding

In what may well become the most discussed issue of the 2016 session, it is appearing increasingly likely a panel appointed by the governor will moveforward with a comprehensive rewrite of the way the state distributes funds for K-12 education. This is an extremely large amount of money and will involvevirtually every stakeholder at the capitol in some way. Our team has been tracking this issue closely and can provide more detailed updates as needed.

Employee Classification

Legislation will be introduced this year to redefine the classification of workers as employees or contractors. There appears to be general agreement thatlegal change is needed to better protect some workers, but the precise contours of the bill will generate attention given the broad potential economicimpact.

Firearms Issues

Many observers wonder whether it is even possible to take additional steps to expand the availability of firearms in Georgia. That said, there remains adesire to allow guns on college campuses. We do not anticipate a large fight on this issue this year, but gun issues can be volatile in Georgia due to thelarge and active contingent of pro-gun voters.

Healthcare Network Issues

A large off-season debate between insurers and healthcare providers will result in multiple bills next year. These bills will address such issues asnetwork adequacy, balance billing, rental networks and other topics. Adding to the complexity of this debate, the state itself is now a top healthcarespender in Georgia, and uses private sector companies to manage much of its spend. Hence, legal changes tend to generate fairly immediate budget impacts,making the challenge of navigating to a compromise that much harder.

Hotel/Motel Fee

Last year’s session resulted in the adoption of a hotel/motel fee as part of a transportation funding solution. The hospitality industry would like torepeal that fee. However, the politics of doing so at this time remain very uncertain.

Immigration

International events will almost certainly result in the introduction of legislation around immigration, law enforcement, and refugee resettlement. Thestate role in these issues is limited, but there are areas legislators can address. This often leads to a debate about the balance between law enforcementand global business connectivity.

MARTA Expansion

Atlanta’s transit system ended the last legislative session without a long-term capital funding solution being incorporated into the transportation bill. Ahigh-profile legislative package is anticipated this year to make adjustments to the transportation special-purpose local-option sales tax (SPLOST)structure in the MARTA footprint to enable voters to decide whether to back several projects that will significantly expand the system.

Medicaid Expansion

Several business groups have launched a study process that will likely culminate in some kind of recommendations to seek a solution with Centers forMedicare & Medicaid Services (CMS) to expand Medicaid coverage in Georgia in a way that is politically palatable to the legislature. It is unlikelythat any specifics will emerge in this legislative session, but the process may well lead to 2017 action.

Medical Marijuana

Last year, the legislature created a process for Georgians with a set of specific medical conditions to legally use marijuana derivatives for treatment.However, there is no process in place to legally produce or obtain the products in Georgia. We anticipate legislation on this topic to be introduced.

Religious Freedom Legislation

One of the most closely watched discussions in 2016 will be a continuation of the 2015 debate over religious freedom legislation. This battle will reopen acomplex set of issues around religious exercise and discrimination.

Student Housing/Privatization

While no legislative activity on university housing is presently likely, the university system has closed on a first round of privatized housing and willlikely pursue a second round later this year.

Taxation

Georgia has an outdated system of taxation for communications services. Any discussion of tax reform will likely include this area, since there is generalagreement that change is needed. Also, ongoing issues related to a rewrite of the auto tax and title system several years ago will almost certainly lead tolegislative debate on how vehicle purchases, transfers and leases are taxed.

Tobacco

Legislation has been pre-filed to increase taxes on tobacco products, putting this perennial topic on the legislature’s radar once again.

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Looking ahead to the legislative session, please contact any member of the McGuireWoods Consulting team if you would like more detailed information on anyof the above issues or other policy topics in Georgia.

Robert L. Fortson, Senior Vice President
Ashley S. Groome, Senior Vice President
Misty H. Holcomb, Vice President
Michael T. Shelnutt, Senior Vice President