Monday, April 05, 2010

GA Budget & Policy Institute Update

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House and Senate Calendar

The House and Senate have finished 33 legislative days. The legislature will not be in session the week of April 5th, but will return for the 34th day on April 12th. The last six legislative days have not been scheduled.
Budget Update

The House of Representatives Appropriations sub-committees are meeting April 12th to unveil their sub-committee recommendations for the fiscal year 2011 budget. Due to the legislative calendar not being set beyond the 34th legislative day on April 12, it is unclear when the FY 2011 budget will come before the full House Appropriations Committee or be voted on by the House of Representatives.

Several of the Senate appropriations sub-committees will be meeting the week of April 5th.

Analyses and fact sheets about the governor's original
Amended FY 2010 budget and FY 2011 proposals, as well as revenue options for addressing the state's financial crisis, are available on

To view a March 15th video presentation on budget and tax issues by GBPI's Sarah Beth Gehl and Tim Sweeney for the Healthcare Georgia Foundation, click here.

The following bills have passed out of the Senate and are now up for consideration in the House of Representatives:

SB 480 creates the State Council of Economic Advisors to help determine official revenue estimates.

SB 421
increases the maximum amount of money in the Revenue Shortfall Reserve from 10 percent of a previous years' net revenues to 15 percent.

Fiscal and Tax Policy

Transparency for Tax Breaks Passes Both Chambers

Senate Bill 206, which requires an accounting of tax breaks currently in the tax code, passed the House unanimously on Thursday last week. The bill passed the Senate unanimously last year. Since the House made changes to the bill, the Senate will have to agree to the changes before the bill can go to the governor.

Senate Passes a Temporary Revenue Increase and a Permanent Tax Cut

The Senate passed HB 307 on Thursday to impose a three-year, 1.45 percent fee on hospitals, generating approximately $169 million in new net revenue for Medicaid. The Senate added language to the House bill to eliminate the insurance premium tax on health insurance premiums once the state's Revenue Shortfall Reserve reaches $500 million, among other changes. (Read more on HB 307 in the health care update below.)

On the same day, the Senate passed HB 1023 -- the so-called JOBS Act. The bill includes a cut to the tax on capital gains, a business tax credit against unemployment insurance (UI) taxes, an angel investor tax credit, and the elimination of the corporate net worth tax. The fiscal note for the bill indicates that the legislation would cause a $3.7 million gain in general revenues in FY 2011 if the federal government approves a provision to give tax credits against unemployment insurance taxes. However, the bill causes the state to lose $7.5 million in general revenues in FY 2012, $36.6 million in FY 2013, and $380 million a year when fully implemented.

Since the Senate made no changes to the bill, HB 1023 goes to the governor for signature or veto. Read what two economists and GBPI's Sarah Beth Gehl had to say on the bill in Sunday's edition of the AJC.

To see a list of important tax legislation passed by the House by Crossover Day, download GBPI's Adding Up the Fiscal Notes.

GBPI Resources About Taxes
List of tax breaks passed in 2009
List of tax breaks passed from 2005-2008
Fact sheet on economic effects of tax increases
Fact sheet on revenue options
Policy brief on repealing deduction for state income taxes

Healthcare and Health Insurance Policy

Hospital and Managed Care Fees

On Thursday April 1, the State Senate passed House Bill 307, which enacts a 1.45 percent hospital provider fee to be deposited in the Indigent Care Trust Fund.

As negotiated with the hospitals, the fee will sunset after three years (at the end of FY 2013) and will be used to fund base operations as well as provider reimbursement rate increases in Georgia's Medicaid program. These rate increases are expected to be included in the House of Representatives version of the fiscal year 2011 budget that will likely be released when the General Assembly returns the week of April 12.

The Senate version of the bill includes three amendments to the version the House passed. The first amendment is a technical amendment to allow the Department of Community Health to adjust the rate for a subset of hospitals if it is needed to comply with federal law.

The second amendment would allow hospitals to count their provider fee payments as "indigent care" for the purposes of meeting state Certificate of Need requirements.

The third amendment would eliminate the state portion of the insurance premium tax for all health insurance products if the state's Revenue Shortfall Reserve reaches $500 million.

The House may now choose to agree with the Senate changes to the bill, or can instead disagree and work out the differences in a conference committee.
For more information about the hospital provider fee in general and about the governor's original budget proposal that included this fee, read Senior Healthcare Analyst Timothy Sweeney's analysis and testimony before a House subcommittee examining the proposal. Also, read the Medicaid fact sheet that examines the Medicaid funding gap the provider fee seeks to address.

Health Insurance Regulation

Several bills dealing with insurance regulation, as well as the oversight and regulation of Georgia's Medicaid program passed their original chamber by the 30th day, but are still awaiting action in the House and Senate.

Both chambers passed bills to allow private companies to sell individual health insurance products that are primarily regulated by other states. The Senate version -- Senate Bill 407 -- was amended to ensure that products sold in Georgia under these provisions must still contain almost all of the coverage mandates required of products currently sold in Georgia. This bill has been assigned to the House Committee on Insurance.

The House version of the bill -- HB 1184 -- does not include these provisions. Under the provisions of HB 1184, out-of-state insurers would be exempted from state laws governing required benefits and consumer protections. This bill has been assigned to the Senate Committee on Insurance and Labor.

The Senate has also passed SB 443, which creates a legislative oversight committee to review and evaluate the Care Management Organizations (CMO) that currently operate a portion of Georgia's Medicaid program. This bill has been assigned to the House Committee on Health and Human Services.

The House passed HB 1407, which requires a single Medicaid administrator for dental services and carves out the administrative contract from beneath the CMOs that operate the bulk of the Medicaid program. This bill has been assigned to the Senate Committee on Health and Human Services.

Bills Related to National Health Reform

In the final week before Crossover Day, both the House and Senate considered several bills seeking to prevent the implementation of health insurance reforms passed on the national level. Two bills that passed the Senate and that are now in the House include:

SB 399 seeks to prevent any state agency or department from implementing any portion of the federal health insurance reform legislation without explicit state legislation authorizing the implementation activities. This bill has been assigned to the House Committee on Governmental Affairs.

SB 317 would make it a state law that Georgians could not be compelled to "participate in any health care system," and that the purchase or sale of health insurance products and/or direct healthcare services could not be prohibited. This bill has been favorably reported by the House Committee on Health and Human Services.
Although these bills are aimed at provisions in the national health insurance reform legislation enacted by the U.S. Congress that assess penalties for individuals who do not obtain health insurance (with exceptions related to affordability) through the federal income tax system, it is unclear as to whether these bills enable Georgians to escape the federal rules if they are enacted.

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