With several issues needing immediate attention and federal spending threatening to impact state operations, it is safe to say the work is clearly cut out for state legislators.
One of the first issues the Georgia General Assembly will need to tackle during the legislative session will be the state budget. This is a pretty complicated process that takes a lot of time, because we have to make sure all state operations are properly funded without overspending. And it's not just one year's budget to review-there are two.
First, we will need to revise the Fiscal Year 2013 Budget. Like your household budget, the state has unexpected expenses from time to time and we will need to review and approve a new budget to keep the numbers balanced. Second, we will need to approve the Fiscal Year 2014 General Budget. Because the FY 2014 Budget is based on projections and also how the FY 2013 ends, it will also need to be revised the following year.
Currently, Georgia is one of eight states who have managed to maintain our AAA bond rating, the highest bond rating available and a symbol of our state's fiscal responsibility. But we are looking at several factors that will require some hard decisions to be made in regards to our budget.
Our Revenue Shortfall Reserve, or "rainy day" fund, is currently sitting at $328 million. This fund as it stands would fund state operations for seven or eight days, maximum. It is anticipated that $170 million of RSR funds will be used in the amended FY 2013 budget for K-12 enrollment growth, cutting the RSR in half.
Although the reason for the RSR is to supplement areas of need in state operations, we also have to figure out how to replenish the money reallocated to other areas. This is going to be a challenge because needs in Medicaid, Education, the State Health Benefit Plan, Higher Education and Retirement will likely use up any new state revenue for at least the next two years.
Another area of budgetary concern revolves around Georgia's Medicaid program. Declining revenue and increased enrollment growth have left our state in need of almost $400 million in new funding to meet annual Medicaid needs. Complicating this matter further is the impending expiration of the Georgia Hospital Provider Payment Program, a key funding source for Georgia's Medicaid services since 2010.
The Hospital Provider Payment Program, also known as the "hospital provider fee," was originally implemented in HB 1055 during the 2010 legislative session to bridge a Medicaid funding shortfall of nearly $600 million.
While, overall, HB 1055 was a $387 million tax cut, it did include a new temporary fee on hospitals. This fee was then matched with federal dollars at a rate of almost $2 for every $1 collected and returned to hospitals as reimbursement for Medicaid services.
If not renewed, Georgia's Medicaid program will lose the 11.88 percent in reimbursement add-on payments. This means the state will be forced to come up with almost $150 million in state general funds to generate enough federal funds to replace the revenue currently generated by the fee-no small feat considering Georgia is already projected for a Medicaid shortfall of $400 million in FY 2014. This will be an issue that must be weighed carefully.
The recent recession placed a significant strain on our state's budget, making it increasingly difficult to fund key programs and services. Imposing a tax on Georgia's already-taxed businesses and taxpayers is never an optimal solution. With that said, Governor Deal has recommended some tough spending cuts to state agencies and Medicaid programs to free up funding.
If the spending cuts are successful, they will generate $250 million for the FY 2013 Amended Budget and $300 million for the FY 2014 General Budget.
Ethics reform is another topic that will be revisited by the Georgia General Assembly in 2013. Currently, Georgia is one of only three states that does not have any sort of restrictions on the type or dollar amount of gifts that legislators can receive from lobbyists, and ethics reform has received overwhelming bipartisan support not only from legislators, but from Georgians statewide.
However, adopting policy that drastically alters our state's ethics laws should be carefully considered and should ensure that we're doing what's in the best interests of the people of Georgia.
Although all but three regions rejected the TSPLOST referendum earlier this year, efforts to advance Georgia's transportation infrastructure are not over.
During the 2013 session, it is likely that legislation will be introduced to reduce the financial burden on local governments due to the TSPLOST's "penalty provision." The TSPLOST "penalty provision" requires local governments to provide a 30 percent match to receive any Local Maintenance Improvement Grants, if the TSPLOST fails to pass in any specific region.
Even before the tragedy at Sandy Hook Elementary in Connecticut, it was anticipated that an effort to streamline and clarify firearm carry laws would be introduced during the 2013 legislative session.
Legislators will need to engage in open and respectful discussions about current weapons carry laws. It is counterproductive to produce a bill that negatively impacts responsible gun owners and irresponsible to pass legislation only for the sake of legislating.
No matter what issue is on the table, it will be important for the members of the Georgia General Assembly to look at all sides of the argument in order to create the best long-term solutions for Georgia.
Please feel free to reach out and contact me with questions or concerns about the district at any time. I am humbled by your support in this year's election and look forward to serving you again in 2013.