Week Ending 7th & 14th of February, 2020
Monday, February 3rd, was Legislative Day 10 and marked the start of the fourth week of the 2020 legislative session; the House and Senate adjourned unexpectedly early on Wednesday, February 5th to allow the House and Senate Appropriations Committees to deep dive into Gov. Kemp’s $28.1 billion budget. The entire week from February 10th through the 14th was spent conducting Appropriations Committee hearings on the FY 2020 and FY 2021 budgets.
Governor Kemp’s FY 2021 budget of Georgia State Funds is proposed at $28.1 billion. Not to confuse readers, but the proposed FY 2021 Total State Expenditures budget is $54.1 billion; the $26 billion amount above the Governor’s $28.1 billion State Funds budget reflects money coming from “Federal Funds and Grants” over which state leaders have little or no control. Regardless, the additional $26 billion is money that flows into our state. The Governor’s budget and the numbers I am referring to appear in the Governor’s proposed 2021 budget.
The 2020 session of the General Assembly budgeting cycle started out in an unusual manner because, in late 2019, Gov. Kemp instructed all state departments to cut their current spending by 4% (FY 2020 budget, the budget year we are currently in) and to plan on a 6% cut in spending for the FY 2021 budget.
The Governor’s budget reduction decision is based on months of soft 2019 state tax revenue receipts and a moderate concern for a softening overall U.S. economy, a forecast none of us hopes come to pass. For example, November 2019 total tax revenue was down 1.2%. In contrast, January 2020 tax revenues are up by 4.5% - go figure.
I applaud the Governor for conservative budget planning. The concern we all share, however, is that some important government services will be cut.
2021 Budget Highlights and Revenue Opportunities:
Internet Sales Tax and Georgia’s Film Tax Credit
- $28.1 billion FY 2021 Governor’s budget – reflects 6% reduction in 2021 state agency spending. The Governor is also requiring a 4% in the current year’s 2020 FY budget – which I support;
- The Governor’s budget includes the $2,000 promised teacher pay raise
($350 million) – which I support’
- The Governor’s budget does not include a reduction in the state income tax rate to 5.5% that the Legislature promised for 2020 - which I support. Possible sources of the income are the newly passed Internet Sales Tax and capping/controlling the Film Tax Credit.
Internet Sales Tax – the Governor signed this new legislation in early 2020, recently passed by the Legislature; it will raise hundreds of millions in currently lost sales tax revenue, and will help level the playing field between important, local brick and mortar and their internet company competitors.
Film Tax Credit (FTC) –
- $870 million in Film Tax Credits (FTC) in 2018 equals 3% of the state budget, up from the $140 million in 2010 tax credits;
- The $870 million in 2018 FTC is the highest in the nation; #2 is CA with $330 million;
- $2.9 billion in actual, audited direct spending benefit for GA for 2018 vs. $9.5 billion claimed by the Georgia Department of Economic Development – a $6 billion difference or shortfall that many are incorrectly using to justify the current law;
- Based on a recent audit, GA’s FTC is wasting millions in tax credit dollars amounting to $250 million, or approx. 30%, of 2018’s $870 million total credits;
For example, qualified film productions companies, that have little or no Georgia tax liability, can transfer or sell tax credits to companies that do not spend any film production money in Georgia. This is not the intention of the FTC.
- I strongly support the GA Legislature capping the FTC, closing loopholes and making other changes to fix FTC problems (which are opposed by the Georgia Chamber of Commerce and senior House Leadership);
- Links to more information on the Film Tax Credit:
Results of House Appropriations Hearings (Week of February 14th)
During week-ending February 14th, while the legislature was in adjournment, the House and Senate Appropriations Committees met, hearing presentations from the Governor’s Office, the Office of Planning and Budget, and various agency and department heads. Stating the obvious, it is important for all Georgians that the Executive (Governor’s office) and Legislative (House and Senate) branches of our state government work together for the benefit of all Georgians - which happened this past week.
After several meetings and hours of testimony, the House Appropriations Committee found savings in different areas of the amended budget for fiscal year 2020 (current year) and moved funds to programs and departments to minimize the impact of the 4% budget cuts. Generally, I agree that these are important priorities for the House and the General Assembly:
- mental health services that help provide thousands of Georgians;
- medical residencies for health care providers;
- cooperative extensions that educate and provide information ranging from farmers to K-12 students across the state;
- agriculture and marine research that drive our state’s ability to take care of its environment and support Georgia industries, such as the Oyster Mariculture legislation that I initiated in 2018, that was signed into law becoming effective March 1, 2020; and
- accountability courts that provide a positive alternative to individuals who might otherwise go to jail.
These programs and services are important to communities across Georgia—especially rural Georgia—where many of these programs are the first lines of access to healthcare, crop research, and rehabilitation. More details on the final changes to the amended budget for fiscal year 2020 will be available in the coming weeks which I will certainly share.
Next House Session Convenes Tuesday, February 18th
The House and Senate will reconvene on Tuesday, February 18 for Legislative Day 13 of the 40-day 2020 session.
During the balance of the session, I will continue to work on behalf of citizens of House District 167 and the State of Georgia, attending committee hearings for my seven committee assignments on active legislation, plus actively participating in a variety of meetings, plus regular interaction with fellow House members on important issues facing the General Assembly.
As you might expect, my active service on the seven standing committees of the House of Representatives I am a member of – 1) Energy, Utilities & Telecommunications; 2) Motor Vehicles; 3) Regulated Industries; 4) Insurance; 5) Interstate Cooperation; 6) Science & Technology; and 7) Small Business Development – keep me very busy. Not including, of course, meeting with the Governor’s staff on legislation; working on legislation that I sponsor or co-sponsor; studying bills as they move through the House and Senate; participation in Caucus meetings; and meetings with constituents and persons representing various interests, and of course participating in House sessions on a daily basis.
The House and Senate will reconvene on Tuesday, February 18 for Legislative Day 13. As always, I will be working diligently on behalf of our entire district and our state in my service to you. I encourage you to read updates like this to stay informed on legislative matters that affect our district and state. Our official House of Representatives website has a number of tools to help you stay up-to-date on what’s going on at the Capitol. You can watch a live stream of the House proceedings; view live and archived committee meetings and review legislation we are considering.
I welcome you to reach out to me and share your thoughts and opinions as we move throughout the 2020 legislative session. I can be reached via email at email@example.com, or firstname.lastname@example.org, on Facebook at facebook.com/votejeffjones and on my personal page facebook.com/jeffjones11, and by phone at my Atlanta office (404) 656-0178.
As always, thank you for allowing me to serve as your State Representative, which I consider to be an honor and privilege.
With kind regards,