COLORBEARER OF ATHENS, GEORGIA LOCALLY OWNED SINCE 1987
January 16, 2013

Capitol Impact

Legislative Choices Will Affect Us All

There is not an infinite amount of money in Georgia’s annual budget. At the most, legislators will have a little more than $19 billion in state revenues to spend on the programs that are funded. Because there are a limited number of tax dollars to allocate, lawmakers have to make hard decisions about what they will pay for and what they will discard.

We have seen that hard choice being made over the past decade. The General Assembly and the governor made the choice to give dozens of tax breaks to corporations and special interest groups during that 10-year period, in the purported belief that these financial incentives would help “create jobs.” Legislators are required by the constitution to adopt a balanced budget every year. When you grant that many tax breaks, you have to pay for them somehow.

Our elected leadership effectively paid for those tax breaks by cutting off state funds to local school systems. Since Sonny Perdue became governor in 2003, Georgia has enacted a series of “austerity cuts” to education that reduced state funding to local schools by a combined total of more than $5 billion. You can have some enlightening debates as to whether this was the best choice we could have made for the state’s future wellbeing, but it was the choice that legislators made.

As the latest session of the General Assembly gets underway, lawmakers find themselves with another interesting choice to make about their state’s future. They will be asked to pass a bill that allows the Georgia World Congress Center Authority to spend $300 million in hotel-motel tax revenues on a new stadium for Arthur Blank and his Atlanta Falcons football franchise.

At the same time they are mulling that proposal to give state tax money to one of the wealthiest individuals in Georgia, legislators will have a decision to make about the Medicaid program that provides healthcare services for low-income families. The Legislature adopted a Medicaid provider fee—also known as a hospital bed tax—in 2010 to provide additional funds for the program. Each hospital pays a 1.45 percent tax on their net patient revenue, and the money brings in about $400 million a year in federal matching funds that help pay for Medicaid services.

The provider fee will expire this year unless the General Assembly passes a bill to extend it. If the tax is not renewed, the financially stressed Medicaid program will be in deeper trouble and hospitals in rural areas that depend on Medicaid payments will likely be forced to close.

The bed tax is paid by hospitals, and the state’s three major hospital groups are united in their support of it: the Georgia Hospital Association, the Georgia Alliance of Community Hospitals and the rural hospital group HomeTown Health.

Gov. Nathan Deal and House Speaker David Ralston also agree that some type of provider fee will need to be enacted to keep Medicaid afloat and allow rural hospitals to continue operating. They are facing powerful opposition, however, from anti-tax activist Grover Norquist, the Washington-based figure who has persuaded dozens of elected officials to sign pledges that they won’t ever vote to raise taxes.

“A vote in favor of extending the bed tax is a violation of the Taxpayer Protection Pledge,” Norquist said last fall in a letter to legislators warning them not to renew the provider fee.

Georgia’s lawmakers have some important choices to make. Is a football stadium for an NFL team owned by a billionaire more important to our citizens than keeping rural hospitals open? Do legislators owe their allegiance to the people who voted to put them in office, or to a political crank in Washington, D.C.?

The choices they make on these vital issues will say a lot about the future prosperity of this state.

Tom Crawford is editor of The Georgia Report, an Internet news service at gareport.com that reports on government and politics in Georgia. He can be reached at tcrawford@gareport.com

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