The General Assembly’s joint budget hearings for Governor Kemp’s Amended FY2019 and FY2020 budget proposals began Tuesday with appearances by the state agency heads. Members from both chambers congregated in the appropriations hearing room of the Capitol to learn more about the important work the State’s departments are performing (and hope to continue performing) across the state, and why the allocations presented the budget requests are necessary. More specifics on the hearings in today’s Special Budget Hearing Edition of the #GoldDomeReport.

In this Report:

• Joint Appropriations Committees Hear Budget Proposals
• House, Senate Announce Appropriations Committee Subcommittees

Joint Appropriations Committees Hear Budget Proposals

On Tuesday, the day started with Kelly Farr, the newly minted director of the Governor’s Office of Planning and Budget, giving a brief overview of the larger proposals found in the budget, including Governor Kemp’s widely touted plan for a $3,000 permanent salary increase for teachers across the state – the first installment of his overall proposed $5,000 raise for each of the state’s certificated individuals in public schools.

Next up was State Fiscal Economist Dr. Kenneth Heaghney. Dr. Heaghney provided the members with a revenue estimate for the fiscal year ahead, first painting the picture of Georgia’s economic trends and expectations. Dr. Heaghney did outline that, for FY 2018, they had budgeted an increase in revenues of 2.7 percent but actually achieved growth was 4.5 percent. For the first four months of FY 2019, growth has been overall at 4.6 percent. He also highlighted the state’s above average job growth in the last 21 months, adding 114,000 jobs (16,000 jobs were added in December alone).

Georgia also excels in consumer spending and overall household wealth, important factors that contribute to the positive forecast. Dr. Heaghney noted that the biggest risks to Georgia’s economic growth are policy uncertainty and slow global growth (enumerating risks as trade, government shutdown, slowing global growth, interest rates and changes in policies). Georgia has seen a recent decrease in housing sales, causing overall home valuation increases to decelerate – but Dr. Heaghney was quick to note that we are not in a seller’s market. The state’s reserve funds have grown to $2.5 billion, a number that Dr. Heaghney said indicates the state’s high level of preparedness for any upcoming recession.  

Overall, Dr. Heaghney explained that, because of recent tax break legislation­, Georgia can expect to see a decrease in the rate of revenue growth we have seen in the last few years, but should not expect a significant hit to state coffers. Some new taxes, such as the retail tax requirement passed via HB 61 in 2018, took effect at the start of the new year—leading to an estimated $500-$600 million dollars in revenue for the state. Rural areas of the state have seen more stagnation in economic growth.  In sum, it would appear that revenue collections will see a growth of 4.1 percent in FY 2019 and 3.5 percent in FY 2020.         

The first department to take the podium was the Department of Education (“DOE”), led by Superintendent Richard Woods. Mr. Woods noted that DOE’s priorities, putting Georgia students first, include improving school safety, something he said must be done both in terms of physical improvements to buildings and by bolstering mental health services for students. Superintendent Woods continued with his support for increased teacher wages and said the Department would like to seek legislative action to reduce testing requirements to federal minimums. Staffing is an issue for DOE – they need a school safety officer dedicated at the state level; a mental health coordinator; and a military liaison (to work in particular with ROTC). He also noted the wrap services needed for students. DOE CFO Ted Beck explained that because of the slowdown in enrollment growth this year and that predicted for ensuing years, the department expects to be able to utilize funding in more ways to improve their services. Mr. Beck indicated that two-thirds of districts lost students in the last five years. The midterm adjustment for FY 2019 Amended QBE is $89.6 million; in FY 2020, more than $134.1 million is proposed for enrollment growth and training and experience.

The Department of Natural Resources offered a short presentation, explaining that because of the increase in lifetime license sales, they have a higher expected budget for the Amended FY 2019 budget. He did accent the additional $14 million in the Department of Community Affairs budget, for One Georgia Authority, for water planning efforts.

The head of the Environment Protection Division (“EPD”), Rick Dunn, walked members through the process by which the state must engage with the federal government over cost sharing funds for Lake Lanier water storage. The EPD also wishes to add a new drinking water engineer in its Brunswick office, along with an environmental compliance officer in either their Albany or Augusta office. Mr. Dunn also outlined more information about the Hazardous Waste Trust Fund and its use for remediation efforts.

University System of Georgia Chancellor Steve Wrigley explained the importance of higher education in Georgia by showing that 99% of jobs in the period after the great recession, went to individuals with some secondary education. Over the last five years, tuition increases have been at 1.8 percent. Chancellor Wrigley also touted the efforts made to place textbooks on-ine for students (an annual $19 million savings). The System also discussed some of their budget requests, including $9.9 million in tobacco settlement funds to be allocated to the Augusta University Health Campus for expansion projects and clinical radiation therapy renovations. Chancellor Wrigley outlined the Board of Regents’ bond requests for major repairs and rehabilitation and new construction. For instance, there are six construction bond projects in the budget pipeline: Georgia College and State University ($18.3 million); Georgia State University ($48 million); Kennesaw State University ($39.5 million); Middle Georgia State University – Cochran ($10.6 million); University of North Georgia ($13.6 million); and University of West Georgia ($14.9 million).

The Technical College System (“TCSG”), headed by Commissioner Matt Arthur, made note of the extreme increase in dual enrollment numbers in the last few years, of which most growth occurred in rural areas. Commissioner Arthur also explained that the HOPE Career Grant has seen a 300% increase in use since 2016 (with 17 programs and 30,000 students), drastically increasing the number of students in the technical college system. He also noted the “retraining” of students when they are not hired; only about eight such students need this retraining on an annual basis. There are 136,000 students in technical education; 53,000 students in adult education. There were 351,301 individuals touched by TCSG in 2018. He mentioned that Georgia’s QuickStart program delivered 79 projects in 2018 (serving 32,212 individuals). They have seen 479 industry apprenticeships, but Rep. Lynn Smith (R-Newnan) was quick to point out that the apprenticeship program for tenth graders was not funded in the budget.  The average age of students in TCSG is 27 years old.

The Department of Community Health, led by Commissioner Frank Berry, highlighted the fact that currently, 52% of children in Georgia receive benefits through DCH. Commissioner Berry identified five areas of exposure for the department:

1. Information Technology
2. Medicaid Transformation
3. Continuous Process Improvement
4. Healthcare Analytics and Reporting
5. Certificate of Need

In 2018, DCH’s statistics show that it covered 61,000 Medicaid births; 519,000 enrollees in Medicaid’s Aged, Blind and Disabled program; 665,000 individuals were enrolled in the State Health Benefit Plan; and there were more than 24,000 healthcare facility regulation efforts.

Commissioner Berry explained that the Department is neutral to the outcome of current conversations about Certificate of Need (“CON”) but it is prepared to have discussions with legislators (there were 82 CON applications in 2018). In the Amended FY 2019 budget, DCH has asked for $1,000,000 for an independent Medicaid consultant to begin investigating the waiver process—a line item Governor Kemp announced in his State of the State address last Thursday. The Department expects FY 2019 Amended to have a need of $33.7 million and FY 2020 require $88,885,270 for benefit growth.

Department of Human Services Commissioner Robyn Crittenden spoke more to the needs of the elderly population and the need for more caseworkers to identify and respond to elder abuse (bringing the caseload to 1:25).  Division of Family and Children’s Services (“DFCS”) Director Tom Rawlings highlighted many new objectives for the agency created by the passage of the federal Family First Prevention Services Act in 2018. In the requests for the Amended FY 2019 budget, the agency asks for a $153,745 increase for enhancements to their TRAILS program in preparation for the implantation of Family First. DFCS also asked for $28,423 for out-of-home care programs. The FY 2020 budget requests include:

• $1.8 million for PeachCare for kids;
• $957,087 for increases in elder abuse investigation case workers;
• $366,752 for five new public guardianship case workers;
• $945,955 to reduce the waiting list for home delivered meals;
• $1,898,000 for 1,000 additional slots for home and community services;
• $338,802 for Aging and Disability Resource Connections;
• Continuation of TRAILS funding; and
• $69,331 for a compliance officer in Residential Child Care.

Director Rawlings further explained the plans to bring the state in line with Family First requirements. These include SNAP work requirements and $804,000 for child welfare services to help providers. DFCS must make changes to receive federal matching funds including accreditation for child welfare services. In the Amended FY2019 budget, DFCS asks for $9,884,773 in increases for out-of-home utilization in line with its 7.1% growth. For FY 2020, DFCS would like to see:

• $501,796 in adoption service increases to match the 4.2% growth;
• $145,663 for FMAP increases;
• $3,438,600 for SHINES IT to prepare for Family First implementation;
• $438,600 for a project management team to coordinate Family First implementation;
• $867,058 to replace federal money for childcare placement with priority families;
• $427,550 for new quality assurance and monitoring of child service welfare support service providers;
• $940,000 to implement a pilot program for closed foster care cases;
• $849,951 for 50 additional Medicaid-aged Blind and Disabled Medicaid eligibility caseworkers;
• $9.8 to match 7.1% in out-of-home funding (the same as amended FY2019); and
• $116,435 for FMAP adjustments.

The second day of Joint Budget Hearings got off to an early start Wednesday morning. First to present was the Georgia Supreme Court, led by Chief Justice Harold Melton. The Court’s main point was to provide an update on the construction of the new judicial complex, which they expect to be fully completed about a year from now. Justice Melton also provided information about the Judicial Council’s budget including its Committee on Justice for Children which coordinates with the Department of Family and Children Services with an information sharing agreement.

Commissioner Gary Black was up next, walking legislators through the Georgia Department of Agriculture’s budget. Highlights include the merit based pay raise ($657,472) slotted for FY 2020, which Commissioner Black said was lower than the $927,000 requested by the department to meet the 2% pay raise goal set by Governor Kemp. Commissioner Black also brought attention to the $3,968,000 required to make modifications and fixes to a poultry lab built by the state in 2014 for over $14,000,000; this issue did spark some questions – especially as to why the state had not litigated this issue.

Georgia’s new Secretary of State, Brad Raffensberger, discussed the $150,000,000 line item allocated to address the procurement of new voting machines statewide. Secretary Raffensberger also explained that the budget proposal provides for two new investigators to look into issues in the professional licensure process.

The Department of Behavioral Health and Developmental Disabilities (“DBHDD”) began by providing an update on the State’s Department of Justice settlement agreement to pursue more community health solutions. At current, the state is waiting to hear back after Governor Nathan Deal, at the end of his term, sent a letter to the Department of Justice requesting an end to federal oversight; however, a response is currently prevented by the ongoing shutdown. In the FY 2020 budget, the DBHBB plans to annualize:

• Behavioral Health Crisis Funding, at a cost of $8,263,770;
• 125 FY 2019 IDD NOW & COMP Waivers at a cost of $3,666,672; and
• Supported Employment for 500 Youth and Young Adults as part of the C&A Mental Health Commission at a cost of $1,530,000.  

Additionally, DBHDD listed their priorities going forward to include 125 new NOW & COMP Waivers (6 months of funding) at $4,249,798. They also plan to increase ASO funding in both the Amended FY 2019 and FY 2020 budgets at $8,513,031 and $9,547,164 respectively. The Department wishes to receive $10,550,421 in FY 2020 for core behavioral health services. The Governor’s school safety proposal’s call for more APEX program funding finds its way into the DBHDD budget, asking for $8.4 million. Lastly, the Department wishes to add Crisis Bed capacity by 21 beds at a cost of $10,212,254.

The day concluded with remarks from Governor Brian Kemp. The Governor kept on the same message from his State of the State address, calling for us to build upon our state’s already solid foundation. He made note of his request for a $3,000 permanent salary increase for all certified Georgia teachers along with the $69 million earmarked for school safety funds allocated to every public school. Governor Kemp also touted the need for $28.1 in behavioral health services along with $4.3 million to aid in pretrial diversion processes for non-violent offenders.

Thursday afternoon saw an uneventful hearing on Federal Block Grants, led by Senator Renee Unterman (R-Buford) and Representative Katie Dempsey (R-Rome). In the hearing, members of the House and Senate Human Services Appropriations Subcommittees heard from the Department of Behavioral Health and Developmental Disabilities about two grants that received public testimony. These grants will be used for substance abuse disorder and community mental health programs. After testimony from the Georgia Council on Aging, which urged for SSBG funding to be used for access to home and community based services, the hearing was adjourned.

House, Senate Announce Appropriations Committee Subcommittees

The list of new House Appropriations subcommittee leaders and members has been released:

Economic Development Subcommittee
Representative Penny Houston (Chair)
Representative Steve Tarvin (Vice-chair)
Representative Kevin Cooke
Representative Carl Wayne Gilliard
Representative Mack Jackson
Representative Marc Morris
Representative Jason Ridley
Representative Jan Tankersley

Education
Representative Robert Dickey (Chair)
Representative Mike Glanton (Vice-chair)
Representative Wes Cantrell
Representative Jan Jones
Representative Todd Jones
Representative Eddie Lumsden
Representative Randy Nix
Representative Deborah Silcox
Representative Valencia Stovall
Representative Kevin Tanner

General Government
Representative Sam Watson (Chair)
Representative Clay Pirkle
Representative David Clark (Vice-chair)
Representative Timothy Barr
Representative Matt Hatchett
Representative Don Parsons
Representative Brian Prince
Representative Jimmy Pruett
Representative Lynn Smith

Health
Representative Butch Parrish (Chair)
Representative Darlene Taylor (Vice-chair)
Representative Matt Dollar
Representative Pat Gardner
Representative Carolyn Hugley
Representative Jesse Petrea
Representative Ron Stephens

Higher Education
Representative David Knight (Chair)
Representative Calvin Smyre (Vice-chair)
Representative Jon Burns
Representative Mike Cheokas
Representative Barry Fleming
Representative Rick Jasperse
Representative Sheila Jones
Representative Jodi Lott
Representative Chuck Martin
Representative Ed Setzler
Representative Richard Smith

Human Resources
Representative Katie Dempsey (Chair)
Representative Tom Kirby (Vice-chair)
Representative Emory Dunahoo
Representative Michele Henson
Representative Henry “Wayne” Howard
Representative Karen Mathiak
Representative Greg Morris
Representative Mary Margaret Oliver
Representative Bert Reeves

Public Safety
Representative Andy Welch (Chair)
Representative Terry Rogers (Vice-chair)
Representative Mandi Ballinger
Representative Dave Belton
Representative Robert Bruce
Representative Heath Clark
Representative Micah Gravley
Representative Gerald Greene
Representative Eddie Lumsden
Representative Alan Powell
Representative Jay Powell
Representative Bill Werkheiser
Representative Al Williams

Transportation
Representative Shaw Blackmon (Chair)
Representative Dale Rutledge (Vice-chair)
Representative James Beverly
Representative J. Collins
Representative Pam Dickerson
Representative Chuck Effstration
Representative Bill Hitchens
Representative Dominic LaRiccia
Representative Rick Williams

The list of new Senate Appropriations subcommittee leaders and members was released Thursday afternoon:

Agriculture & Natural Resources Subcommittee:
Subcommittee Chair: Senator John Wilkinson
Senator Greg Kirk (Vice-chair)
Senator Ellis Black
Senator William Ligon
Senator Freddie Powell Sims
Senator Blake Tillery

Community Health Subcommittee:
Subcommittee Chair: Senator Dean Burke
Senator Renee Unterman (Vice-chair)
Senator John Albers
Senator Nan Orrock
Senator Valencia Seay
Senator Ben Watson

Criminal Justice & Public Safety Subcommittee:
Subcommittee Chair: Senator John Albers
Senator Tyler Harper (Vice-chair)
Senator John Kennedy
Senator David Lucas
Senator Valencia Seay
Senator Jesse Stone
Senator Blake Tillery

Economic Development Subcommittee:
Subcommittee Chair: Senator Jeff Mullis
Senator Frank Ginn (Vice-chair)
Senator Mike Dugan
Senator Chuck Hufstetler
Senator Emanuel Jones
Senator Jen Jordan
Senator Butch Miller
Senator Brian Strickland

Education Subcommittee:
Subcommittee Chair: Senator Ellis Black
Senator John Wilkinson (Vice-chair)
Senator Butch Miller
Senator Freddie Powell Sims
Senator Jesse Stone
Senator Lindsey Tippins

Fiscal Management & General Government Subcommittee:
Subcommittee Chair: Senator Frank Ginn
Senator Bruce Thompson (Vice-chair)
Senator Gail Davenport
Senator David Lucas
Senator Lindsey Tippins
Senator Larry Walker III

Higher Education Subcommittee:
Subcommittee Chair: Senator Lindsey Tippins
Senator Steve Gooch (Vice-chair)
Senator Gail Davenport
Senator Mike Dugan
Senator Frank Ginn
Senator Tyler Harper
Senator Renee Unterman

Human Development and Public Health Subcommittee:
Subcommittee Chair: Senator Renee Unterman
Senator Dean Burke (Vice-chair)
Senator Chuck Hufstetler
Senator Greg Kirk
Senator Butch Miller
Senator Horacena Tate
Senator Ben Watson

Insurance and Labor Subcommittee:
Subcommittee Chair: Senator Ben Watson
Senator Burt Jones (Vice-chair)
Senator Marty Harbin
Senator David Lucas
Senator Nan Orrock
Senator Larry Walker III

Judicial Subcommittee:
Subcommittee Chair: Senator William Ligon
Senator Jesse Stone(Vice-chair)
Senator Emanuel Jones
Senator Jen Jordan
Senator John Kennedy
Senator Brian Strickland
Senator Blake Tillery

Transportation Subcommittee:
Subcommittee Chair: Senator Steve Gooch
Senator Marty Harbin (Vice-chair)
Senator Burt Jones
Senator Jeff Mullis
Senator Horacena Tate
Senator Bruce Thompson
Senator Larry Walker III