HB 1055 came to the House floor at Crossover time as a bill raising almost $100 million through increases in various fees. Originally these covered everything from more than doubling the cost to file a civil case in superior court to charging a fee for the Market Bulletin. The bill passed the House, but the margin was much closer than most votes. In reality, the majority of our votes really aren’t very controversial and usually don’t generate more than a good handful of no votes. This bill got upwards of 60 no votes, with mine being one of them.
You have probably seen by now news reports of the near melt-down in the Senate that occurred over the hospital provider fee, but many of the same influences were at work on HB 1055. The Senate made some changes to the bill but did pass it, sending it back to the House. You will recall that bills must pass both chambers literally in exactly the same form, so the Senate’s action put the ball back in the House’s court for the next step.
This brings us to the point in the process where much mischief happens near the end of a legislative session. When a House bill comes back after being passed by the Senate with any changes at all, it goes in a separate folder on our desks labeled Agree/Disagree. The process is the same regardless of whether the Senate’s changes were minor or completely changed the impact of the bill.
Once a bill is in that folder it can become the subject of a vote at any time either on the day it first appears there or any subsequent legislative day. The vote happens whenever the bill’s primary sponsor makes a motion either that the House agree or that the House disagree to the Senate’s changes. Motions to disagree are generally safe and function mostly to kick the can down the road toward trying to resolve the differences between the two versions. Motions to agree, however, can be dangerous, as that triggers a vote to approve the Senate’s version of the bill that is considered final passage of the bill and sends it to the governor. Remember, this applies no matter how dramatically the Senate may have changed the original impact of the bill. There is no notice of the time the motion is made or whether the sponsor will move to agree or disagree, so keeping up with what is going on with these bills can become a daunting and quickly moving task.
If that were not enough, there is one more wrinkle that can come into play: the sponsor can move that the House agree to the Senate amendment to the bill as amended by the House. An amendment is then presented to the House for consideration. If adopted, the newly amended bill goes back to the Senate where it can accept the House’s amendment or insist on its own version. Remember, this process is the same regardless of whether the amendment is minor or dramatically changes the bill.
Now back to HB 1055, where that is exactly what happened. However, you also need to know the story behind what happened. Our present leadership had already decided that the fee increases would be pushed through so that the anticipated increases in revenue could be counted toward the budget figures for the FY 2011 budget. That plan hit a snag when many members resisted and it appeared HB 1055 might not have the votes to pass. This prompted leadership to make some very unusual maneuvers.
HB 1055 was brought up for a vote along with an amendment that would eliminate the state’s 0.25 mill of property taxes and the state income tax on retirement income over $35,000. Thus, so the argument went, members should gleefully support the new bill because it had now been magically transformed into a big tax cut for everyone in the state!
Not so fast, my friends – the devil’s in the details. First, there is the little problem of whether it’s even legal to combine these subjects into a single bill. Personally, I don’t think it is and expect this whole mess to hit the fan later on because of it. A group of us even forced the House to vote on overriding the speaker’s decision to allow it. I knew that effort would fail, and I’m sure he was none too pleased with it, but I’m not going to just sit there while they try to ram through something this wrong.
As for the substance of the amendment, I have no problem with eliminating the state’s 0.25 mill of property taxes and would have voted for it in a separate bill. Before you get too excited about it, though, look at the numbers: for a $100,000 house in Polk County receiving standard homestead exemption, this will shave less than $10 off the tax bill. I know every little bit helps, but this one is more hype than help.
Meanwhile, I have big problems with the other tax cut included in the amendment: eliminating the state income tax on retirement income over $35,000. As my phrasing indicates, we already exempt the first $35,000 of retirement income from state taxes, and by definition social security doesn’t count toward that amount. Thus, seniors with less than $35,000 of non-social security retirement income get nothing here.
The real problem with this is that “retirement income” is a term that has a specific definition given to it by existing law. It is things like interest on CDs and dividends paid by stocks; it does not include income from work. Thus, this bill means a wealthy senior with $15 million per year in interest and dividend income will pay no state income taxes at all on that money, while the 70 year old Wal-Mart greeter who works that job faithfully because she needs the money to pay her bills will continue to pay state income tax just as she now does. That’s not just wrong; it’s outrageous and immoral.
Here’s the bottom line on HB 1055: if you’re a senior with more than $35,000 per year in income from things like interest and dividends, you got the gold mine. If that description doesn’t fit you, you got the shaft.
The rest of the story is that the Senate passed this the same afternoon, and it has now gone to the governor. He has indicated he plans to sign it.
You can reach me with questions or comments at (770) 748-4090 or in Atlanta at (404) 656-0265. If you prefer email, use firstname.lastname@example.org and be sure to include your name and address so I can identify you as one of my home folks. As always, thank you for the honor of representing you in the Georgia House of Representatives.