Charlie Harper: New Year, old problems

January 8, 2013 

Here in Georgia, we'll be speaking a lot about taxes -- though depending on who is proposing what, we should probably call them fees. After all, no one has signed any pledges that say they won't raise any fees.

Georgia currently has a fee charged to all hospitals on their gross revenues, commonly called the hospital bed tax. Through a system that makes sense only to the government, by charging hospitals this extra tax the federal government is willing to match more state dollars for Medicaid reimbursement which is then, in theory, returned to the hospitals via higher Medicaid reimbursements. Passed three years ago, the fee/tax is now up for renewal. Expect the battle over this to generate many headlines as those who are opposed scream "tax increase," while those who support it will point at the large budget gap Georgia must already fill.

Some estimates of Georgia's projected shortfall for next year will already be near $1 billion. Taking away another $650 million if the bed tax isn't renewed has the state the wrong way, especially since about $400 million of this year's projected shortfall is caused by an already underfunded and growing Medicaid program. Anticipating drastic cuts to Medicaid reimbursements if the bed tax is not renewed, the Georgia Hospital Association has proposed changing the distribution formula among its members for reimbursements under the program to tamp down opposition to its renewal.

Also under the Gold Dome will be a lot of discussion on ethics reform. The 2012 session was highlighted by many members of the General Assembly and virtually all of its leadership claiming Georgia didn't have problems with its ethics laws and revisions weren't needed. After seeing the response from both Republicans and Democrats on the matter on July primary ballots, there is now an apparent race to see who can get in front of this issue the best.

We can now expect some form of ethics reform to pass both the House and the Senate. Getting both to pass the same bill, and thus generate something the governor can sign into law, will be the first major hurdle to cross. Getting something that accomplishes actual reform - independent oversight of elected officials, an ethics commission with real teeth independent of political appointment power, and some accountability for elected officials with respect to benefits they receive from expenditures from those trying to influence them - will be the true test of whether this goal is accomplished or if we have yet another exercise in writing laws that look good but are not enforceable. The recent round of ethics reform from 2010 is a good example of this.

Georgia's legislators will be keeping an eye on the budget battles in Washington, as cuts to reimbursements to states would have a direct impact on their work at the Capitol. Given that most don't expect any "deal" in D.C. to be struck before late February or March at the earliest, some legislators are openly concerned that they will be able to complete their business in a timely manner.

One, B.J. Pak from Gwinnett County, has gone so far as to suggest that the legislature convene and then suspend operations until there is a deal reached in Washington. They are, of course, limited to 40 working days. The fear is that a D.C. deal may come so late in the session that there wouldn't be time to make corrective actions if the federal funds paid to the state for various programs are severely cut.

There will be a lot of moving parts in politics this political season. It's best to hang on tight and try to keep a sense of humor about these things. After all, 40 days can be a really long time.

Charlie Harper, author and editor of the Peach Pundit blog, writes on Georgia politics and government; www.peachpundit.com.

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