Pardon Our Dust
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The 2017 session in Georgia was interesting primarily because theabsence of any really large, partisan fights meant that smaller itemsbecame more contentious than they typically do. Both chambers moved alarge volume of bills through the process, but House-Senate contentionleft several measures stranded when the final gavel sounded. This willset up a very interesting year next year, since the session will bejammed up against primary elections for every statewide office as wellas all members of the House and Senate.
The following summary outlines some of the higher-profile issues thatwere discussed, explains where they ended up and offers someprojections on what may occur with them over the summer and next year.As always, please contact us if you need more information on any ofthese items.
Tax:2016 was a very interesting year on taxes. Several items passed withvarying levels of debate, including a rural-focused tax credit investmentfund, an exemption for marine repairs, a fix to the “leasing hole” inautomobile taxation and a tax exemption for construction of artsfacilities. The Governor’s Office was also successful in pushing forenhanced incentives for major corporate relocations and a new tax creditfor post-production in the film industry. The biggest item on the table wasa conversion of the income tax into a flat rate, which would have resultedin a fairly large tax cut for many individuals. This larger discussionbogged down in House-Senate differences over structure, but is virtuallycertain to come back next year. Additionally, the House made a large pushto enhance taxation on a range of online retail transactions, which did notpass the Senate floor. A companion effort to increase taxes on ridesharecompanies and online payment processors did not pass. Of any issues thatemerged this year, we expect this global tax conversation to be very activeover the summer and next year.
Budget:This year’s budget was one of the smoothest in recent history. This islargely attributable to the generally good state revenue picture and thegood working relationship the key budget players have established. Thebudget itself provided for a range of long overdue increases, primarily inhealthcare reimbursements and state employee salaries. Growth in healthcarecosts consumed a large portion of the year-over-year increase. The bondpackage in the budget was robust and funds a range of new state capitalprojects, most prominently including a new judicial building on the CapitolHill footprint.
Telecommunications:This session began with a great deal of fanfare over telecommunicationsissues, with electric co-ops moving to get additional leeway to enter thephone and data business. This effort bogged down, but a compromise piece oflegislation to centralize and streamline collection of 911 fees passed.Looking ahead to next year, we anticipate the discussion about how best toenhance data connectivity in rural areas to return. This will include boththe co-op issue and other steps that have been proposed, such as loweringtaxes on rural broadband investment.
Energy:On the energy front, the biggest piece of legislation to move was a rewriteof Georgia’s permitting process for petroleum pipelines. The basicpermitting structure remains largely the same, with enhanced environmentaland notice requirements. The new regime does allow for increased leeway forowners of existing pipelines to obtain eminent domain for repair andcapacity enhancement projects near their current right of way.
Transportation:The biggest debate around transportation concerned transit governance, withthe House and Senate proposing dueling approaches on how to studygovernance and operation of transit systems in metro Atlanta and around thestate. It appears likely at this point that the effort will proceed withseparate House and Senate study committees. Another measure that passedwould increase the state’s ability to use revenue debt to deploy tolledinterstate expansion projects. The House and Senate also agreed on a billthat will create rules of the road for autonomous vehicles. This marked thefirst year that the House and Senate began to use their new authority toearmark some transportation dollars. The exercise of that authority wasfairly limited, but we expect to continue to see a larger legislative rolein the road, rail and bridge funding process going forward.
Solid Waste:As in most sessions, there was debate this year about landfill issues. Thismostly centered on payments to local governments and shipping ofout-of-state coal ash into Georgia. Neither issue moved forward in asignificant way this year, but these issues will continue to be present astightening environmental rules and population growth further pressure theavailability of waste-disposal options.
Medicaid:The session itself was largely devoid of discussion about reforming theMedicaid program, due primarily to the desire to get further federalguidance on the future of the program in general. We expect Georgia to bean early applicant for reform options that the Centers for Medicare &Medicaid Services may offer through waivers or other programs. Lookingahead, the Governor’s Office and the state’s Department of Community Healthwill likely drive this conversation.
Health Facility Regulations:The session began with a push by several parties to loosen thecertificate-of-need restrictions currently contained in Georgia law.Ultimately, none of those proposals moved forward in the legislativeprocess. This is a discussion that is certain to continue in the nextlegislative session.
Healthcare Funding:As mentioned above, the state budget included fairly substantial increasesfor a variety of healthcare programs (primarily Medicaid), includinghospital, outpatient, primary care, dental, home care and mental health.Some of these increases were supported by general funds from state budgetgrowth, while others were funded with one-time funds. Going forward, weexpect the increases to remain in place. Given the funding mixture thatsupported the increases, it is uncertain whether the two-year trend ofbringing reimbursement rates up will continue. This will depend largely onthe future direction of the Medicaid program as well as general increasesneeded to fund the state employee and retiree health benefit program.
Gaming:A high-profile push to expand casino gaming in Georgia failed to move inthe Senate despite substantial support from several key senators. Becausethis would require a constitutional amendment, advocates cited thedifficulty of reaching the two-thirds mark in the upper chamber. Given thenumber of interested parties involved in this discussion, it is certain tocontinue next year, likely with some changes around the mix of publicpurposes that gaming revenues might support. With gaming enterprisesoperating in most of Georgia’s border states, there is a good possibilitythe state will eventually move to create an industry here. Our anticipationis that needs-based scholarships and support for rural hospitals willlikely be the two driving factors that interest legislators in continueddiscussions about gaming and the revenues it generates.
Balance Billing:Georgia patients continue to be unprotected from balance billing byout-of-network healthcare providers. The House and Senate both proposeddifferent versions of legislation that would set a minimum reimbursementrate and prevent patients from being balance billed in many circumstances.The two chambers were unable to agree on a rate that was satisfactory toall interested parties. These bills will await consideration next year, andgiven the impact on consumers here from the practice, we anticipate thediscussion continuing until some kind of conclusion is reached.
Regulatory Reform:The Senate passed a broad regulatory reform package that would streamline arange of state and local processes, including professional licensing,building permit issuance, state permit issuance, and other governmentlicensing processes that impact business operation. The measure ultimatelyfell victim to House-Senate politics, but we expect that it will moveforward in some form next year.
Education:The larger rewrite of the education funding formula in Georgia waspostponed for another year, not so much for political reasons as because itis so complicated that getting it to a place where most key stakeholdersfind it acceptable is very challenging. That said, some components of theeducation reform debate that applied to charter schools were enacted aspart of a smaller reform bill for that sector. Additionally, a statutoryversion of the previous constitutional amendment that would increase thegovernor’s ability to address failing schools was successful. Finally, aneffort to significantly expand private school scholarships fell short inthe state Senate. In higher education, the legislature passed a bill thatis now on the governor’s desk to allow students with concealed-carrypermits to bring guns to many school buildings. Another effort to changethe way schools deal with sexual assault allegations did not pass theSenate.
Alcoholic Beverages:
This seems an appropriate note on which to end a legislative sessionupdate. Two major bills passed this year. The first will give brewpubs anddistilleries more leeway to engage in on-site tastings and limited packagesales. The second will allow farm wineries to increase the amount of grapesand bulk wine they can import to compensate for bad yields in some yearsand meet customer demand for new wine varieties.
For additional information, please contact Ashley Groome or a member of McGuireWoods Consulting’s Georgia State Government Relations Group.
Ashley S. Groome, Senior Vice President and rel=”noopener noreferrer” Director
Robert rel=”noopener noreferrer” L. Fortson, Senior Vice President
Lauren C. Greer, Assistant Vice President
Misty H. Holcomb, Senior Vice President
Danica R. Key, Assistant Vice President
Michael T. Shelnutt, Senior Vice President