Prior to the meeting, Rockmart Mayor Curtis Lewis greeted guests, including Jim E. Higdon, executive director, Paul D. Radford, deputy director, Bill Steiner, executive director, Northwest Georgia Regional Commission and Lou Comer, director, local government services. He also welcomed former Senator Nathan Dean following a request by the visitors to see and chat with him.
A buffet style lunch was served. Councilmen Ray Carter and Steve Miller and Rockmart staff members City Manager Jeff Ellis, Stacey Smith and Clerk Pam Herring welcomed GMA officials during the social period.
Mayor Lewis, in a later interview, said he was impressed with the number of who came not only to hear pros and cons about past and future action in the Georgia General Assembly but to see that a historic building can be saved for future generations. He referred to the renovation of the old school building that now serves as the municipal complex.
During the meeting, pros and cons of the past legislative session were given and emphasis placed on the importance of the “900 pound gorilla” or state budget. Fears were expressed that 2012 will bring even more pressure on local governments. This includes state functions that are being pushed to the local level, whether it is patrolling highways, maintaining state highway rights-of-way or processing crime scene evidence.
Estimates are that in Fiscal Year 2012 the state will face a $1 billion to $2 billion shortfall. Lawmakers used about $1.5 billion in one-time funds to balance the FY2011 budget. These funds were generated by $1 billion in American Recovery & Reinvestment Act funds, $280 million by securitizing GEFA’s Georgia Fund portfolio and over $100 million in various one-time funds.
Some GMA leaders believe the state’s structural deficit will worsen in future fiscal years due to the elimination of the state property tax ($95 million annually), elimination of income on retirement income for wealthy retirees ($150 million annually) and the cut in the capital gains tax and elimination of corporate net worth tax ($380 million).
The fact was emphasized that after short-term revenues from the hospital provider tax sunset in three years, changes passed this session of the General Assembly will create an additional structural deficit of about $900 million annually when fully implemented, unless there is a change in the tax base (such as a broader sales tax) or a tax increase.
Currently the state gets the lion’s share of its revenues from four major sources: Personal income tax 49 cents, state sales tax 34 cents, motor fuel tax 6 cents, corporate income tax 4 cents and other taxes, 7 cents.
Revenues collected are spent for education (58cents), health (19 cents), public safety (9 cents), transportation, (4 cents) and other agencies (10 cents).
Some GMA officials feel that the budget will continue to influence the mood and public policy at the capitol. Predictions are that it could be 2014 before state revenues and the budget stabilized.
During the Listening Session, doubts were voiced about the success of the transportation-funding bill that will allow voters in regions to decide on a one-percent, 10-year, regional sales tax for all types of transportation improvements. It establishes 12 regional special tax districts that correspond to the regional commission boundaries.
Fears are that major projects funded by such a tax would not give as much attention to smaller communities when compared to larger ones, especially those in the metro area.
Time will prove if these fears are reality since project lists are first developed by the State Director of Planning and then refined by regional roundtables created in each special tax district. These roundtables are comprised of the county chair of each county and one municipal representative from each county elected by a caucus of the cities in the district. In the metro Atlanta region, the mayor of Atlanta would also serve on the roundtable.
If a regional roundtable approves the investment list, it would move to a regional referendum to be held on the primary election date in 2012. If the regional roundtable initially rejects the initial investment list, they may make changes to the list but only from the list of possible investments provided by the Director of Planning and then move forward with the referendum in 2012. If a region reaches an impasse, they cannot place the issue on the ballot until 2014 or later.
In each region, a portion of the amount raised would be used for local transportation projects and would be allocated to cities and counties based on a formula of 1/5 population and 4/5 center line road miles. In metro Atlanta, 15% of the funds could be used for local projects. In all other regions, 25% can be used for local projects.
The district meeting also brought comments about the impact of ethics reform:
All candidates for municipal office and municipal officials must file campaign contribution disclosure reports and personal financial disclosure reports directly with the new Georgia Government Transparency and Campaign Finance Commission (formally State Ethics Commission).
Municipal officers and candidates must provide, in writing, a current email address to the Commission prior to January 31 of each year.
Public officials must file a personal financial disclosure report with the Commission between January 1 and July 1 of each year in which the officer holds office. In an election year, candidates and officials must file a personal financial disclosure within 15 days of qualifying as a candidate.
A summary of “bills of interest” for local governments which passed the recent legislative session, was given:
HB 991 puts in place a process similar to baseball arbitration for cities and counties involved in deciding LOST distribution certificates. In this process, should the city(s) and county not reach an agreement, each party would submit their best plan for LOST distribution to a senior judge from outside the judicial circuit and the judge would select the best proposal. This process would avoid the tax lapsing should there be an impasse.
HB 1093 was noted as a good first step in improving the collection and reporting of sales taxes by the Department of Revenue. This bill calls for a voluntary process between cities, counties and DOR whereby local governments acquire the name, address and sales tax ID number from businesses seeking a business license and then provide this information to DOR through a web portal.
HB 1221 puts in place the necessary steps for Georgia to join the Streamlined Sales Tax Agreement that would lead to the voluntary remittance of state and local sales taxes on remote and catalog sales. Estimates indicate that this could generate upwards of $35 million for state and local governments.
SB 206 will require a regular accounting of state tax breaks put into law by the Governor and General Assembly in an effort to bring more transparency and accountability into these types of decisions in the future. The state auditor would be charged with the responsibility of annually issuing a report outlining the costs of all state tax exemptions as part of the state’s annual budget submission.