Rural Development Council Works to Keep Georgia On Your Mind

by Parker Poe Adams & Bernstein LLP
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When singers croon about the old yellow moonlight spilling through the pines of the Georgia woods, the “Georgia rain on the Jasper County clay” and taking the “midnight train to Georgia,” they evoke nostalgia for the state’s graceful beauty and the simpler feel of rural life.  The hard reality is that today, rural areas throughout the state are losing people and jobs to urban centers; currently “53 percent of Georgia counties are in distress,” according to a state House council. 

Rural areas are especially impacted by the continuing loss of young people who leave rural hometowns for school or jobs and do not return. Of the 159 counties in Georgia, 36 now have death rates higher than their birth rates and all of those are in rural Georgia, resulting in an aging population with rising health care needs.

Georgia is often cited as a top state in the nation for business, but the benefits of the tremendous job growth that the state has seen over the past four years have been disproportionately enjoyed by urban areas, primarily the Atlanta and Savannah metropolitan areas. In an economic climate that has become more technology-based, companies prefer locations where millennial talent exists, and more jobs today require a bachelor’s or advanced degree. However, approximately 16 percent of Georgia lacks high-speed internet access necessary for certain jobs and improved quality of life. Further, many rural communities are experiencing a shortage of medical professionals – six counties lack a physician, 63 a pediatrician, 66 a general surgeon, and 79 an OB-GYN. Without a larger share of college graduates and professionals, small towns will struggle for civic and economic survival.

Federal Reserve Bank of Atlanta President Raphael Bostic has observed this urban-rural divide as a growing problem in the Southeast region through his meetings with the Community Depository Institutions Advisory Council. Georgia, however, is facing a particularly difficult urban-rural split: migration patterns of Georgian residents reflect 71 percent relocating to urban centers, 23 percent moving out of state, and only 7 percent choosing a rural relocation.

During the 2017 legislative session of the Georgia General Assembly, the Georgia House of Representatives passed HR 389, creating a two-year bipartisan House Rural Development Council to explore ways to ensure the success and well-being of rural communities. The council, co-chaired by Reps. Terry England of Auburn and Jay Powell of Camilla, held meetings in communities across Georgia during 2017 and heard more than 70 hours of testimony from local officials and policy experts on designated topics, including:

Topic Meeting Date(s) Location
“The Rural Circumstance”

“Access to Broadband”

May 22-23, 2017 Tifton
“Business Start Up and Financing/

Economic Development

June 15-16, 2017 Toccoa
“Behavioral and Physical Health Care”

“Health Care Systems and Workforce”

July 19-20, 2017 Thomasville
“Infrastructure and Labor” August 15, 2017

August 16, 2017

Ellijay

Dalton

“Health Care” September 6-7, 2017 Metter
“Transportation” and

“Forestry”

October 24-25, 2017 Waycross
“Economic Development” and

“Education”

November 8-9, 2017 Albany
“Economic Development” November 28-29, 2017 Warm Springs

As required by HR 389, at the end of 2017, the council filed an initial report of its findings and recommendations, including suggestions for proposed legislation and will file a second report at the end of 2018 prior to the council’s scheduled expiration.

One consistent theme throughout the council discussions with community leaders is the need for greater communication and coordination between counties, between regions, and among community leadership (in government, private sector, non-profits, and higher education institutions) to tackle the interrelated issues facing rural communities and to pool resources and knowledge. For example, there are 75 different financing programs currently available for development projects, such as Community Development Block Grants (CDBG), One Georgia Equity funding and EDGE funding, Regional Economic Business Assistance (REBA), and the Downtown Development Revolving Loan Fund. However, many communities may not be fully aware of all the programs available or how to best utilize them. Joshua Kight of the Dublin Downtown Development Authority emphasized to the council that “rural areas and local development authorities need access to specific expertise on the more complex programs” for development projects.

Notwithstanding the many challenges, the highlights of the council meetings indicate that rural communities are seeing results from their efforts. Regional business parks have attracted businesses in Jeff Davis, Appling, and Bacon counties. Toccoa and Stephens counties have attracted new jobs by sharing development costs and tax revenue. Miller County Hospital reopened as a viable health provider after years of million dollar losses and a closure by creating a niche of expertise through partnerships with the Emory and Grady hospital systems. There has also been increased agritourism in north Gilmer County and the revitalization of downtown Dublin through private and public investments, among other successes. Communities have much to learn from and share with each other.

The final list of recommendations to be presented to the General Assembly during the 2018 legislative session is a combination of concrete items and lofty goals to prioritize workforce, broadband, economic development, education, and health care. Certain proposals are already gaining traction as the best ways to lure young professionals to rural areas and keep them there.

The most dramatic and potentially controversial recommendation is to establish a Rural Relocate and Reside program to incentivize young, professional, high-wage earners to relocate to rural areas with less than 5 percent population growth over the past 5 years. The proposal would provide to residents willing to relocate a one-time, 10-year state income tax deduction amounting to $50,000 per person/ couple filing jointly. Local governments could also implement an accompanying property tax abatement through a voter referendum, in which case the state would increase the state income tax deduction to $100,000.

The pay-people-to-relocate concept has already encountered both support and skepticism, but precedents exist in other states, ranging from free lots and housing allowances to tax rebates and student loan reimbursements. Harmony, Minnesota, began a home construction rebate program in 2014 that offered a cash rebate of up to $12,000 to those who build a new home. That was after the city determined that one obstacle to local employers attracting employees was the lack of move-in ready homes. To entice young people, a Downtown Housing Incentive Program in Niagara Falls, New York, reimburses recent college graduates with a bachelor’s degree or two-year technical degree up to $3,492 per year over two years for loan payments in exchange for living in designated downtown neighborhoods for the full two-year program. On a much larger scale, and serving as the model for the Rural Relocate and Reside proposal, “rural opportunity zones” (ROZ) in 77 of Kansas’ 105 counties provide new residents a state income tax waiver for up to five years. ROZ counties may further offer student loan repayments up to $15,000. Some ROZ counties have gone even further, giving away free lots for new home construction and 5 or 10-year property tax rebates. Among other eligibility requirements, relocating residents must have lived outside of Kansas for five or more years prior to moving and, to qualify for the student loan repayments, relocating residents must have an associate’s, bachelor’s or post-graduate degree. According to the Kansas Commerce Department, the ROZ program has been so popular that some counties have waiting lists.

As currently proposed, 124 of Georgia’s 159 counties would be eligible for the program, including Bibb County and Richmond County, homes to Macon and Savannah, respectively, the state’s largest urban centers outside of Atlanta. Drafting the appropriate scope of county eligibility will likely be an area of negotiation among lawmakers, as will preventing abuse through multiple relocations and the alignment of payments to encourage targeted skill sets.

To keep and serve people in rural areas once they are there, the House Rural Development Council has prioritized a program to expand high-speed internet infrastructure to rural areas, as that is key to quality of life, job opportunities, and telehealth and educational programs. Elements of the expansion program include:

  • Passage of the 5G Broadband Infrastructure Leads to Development (BILD) Act to streamline small cell and broadband permitting.
  • Statutory establishment of a state relationship with Electric Membership Cooperatives and measures to prioritize funding to areas with no cell/internet coverage.
  • Incentives for adopting and implementing a model broadband ordinance for added priority in grant programs and OneGeorgia projects.
  • Flattening the telecommunications tax rate to all providers of the same service, including satellite providers, and utilizing the telecommunications tax toward the expansion program.

To care for both the young and aging populations in rural communities, the council has recommended what it calls a multi-layered approach to stabilize rural health systems, including:

  • Clarifying inconsistencies in remote pharmacy laws.
  • Creation of a consolidated, uniform billing platform for participants in state-funded and administered health care programs.
  • Establishment of a Rural Center for Health Care Innovation and Sustainability to promote a best practices curriculum and centralized health data analytics staff to coordinate with the Department of Community Health, Department of Public Health and Department of Behavioral Health and Development.
  • Development by DCH of an 1115 Medicaid waiver for a five-year demonstration project to shift from a fee-for-service to a capitated, value-based delivery model.

Given their impact on Medicare and Medicaid billings, many of these changes would require federal approval or cooperation.

Other recommendations involve adding to state law the new concept of a limited bed, 24/7 or extended hour “micro hospital” with special provisions under the Certificate of Need (CON) law and the creation of a two-tier system to “protect and keep” existing CON rules for service areas with a population under 85,000. Since all parts of the state are currently subject to the existing CON rules, the latter measure is apparently intended to protect small service area hospitals from potential changes to the CON law that many expect to be proposed during the 2018 session.

Additional council recommendations that are likely to be implemented include (a) establishment of a Center for Rural Prosperity and Innovations with the Board of Regents to connect smaller areas with existing nonprofit, state, and federal programs and to provide leadership training to rural communities, (b) incorporation of the Rural Development Council and the Centers of Innovation Agribusiness, and (c) competitive grant funding for rural schools under the chief turnaround officer’s purview to implement character education curriculum and programming.

The council’s second and final year under HR 389 will likely be dominated by efforts to push its 2017 recommendations into statutory existence, follow-up evaluation of those statutory programs, and determining the long term role of the council once incorporated.

Regardless of where we live in Georgia, we should care about the success and well-being of rural areas in our state not just to preserve the Georgia of troubadours but because, as the recommendations overview notes, “The success of the state’s metro areas is deeply aligned with the contributions of rural Georgia. Products produced in rural communities sustain the urban population’s demand for food, clothing, and housing. The entire state’s well-being depends on a recognition of this relationship.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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