Legislators' reactions mixed on fees, tax cuts

By Ashley Speagle

Correspondent

ATLANTA -- The Georgia Senate on Wednesday passed a $17.8 billion budget for the fiscal year that begins July 1.

The House passed the budget last week.

But not all the North Georgia delegation was in agreement on moves to raise about $325 million in revenue for the new budget.

"I can't imagine anybody being happy, but your constitutional job is to pass a balanced budget and nothing else," said Rep. John Meadows, R-Calhoun.

The Legislature still needs to pass an amended 2010 budget and wind up other business before its scheduled April 29 adjournment.

Lawmakers last week passed and sent to Gov. Sonny Perdue bills that would raise fees for state services by $96 million and collect a 1.45 percent fee from hospitals, together expected to raise about $229 million.

Representatives spread money from increased user fees throughout the 2011 budget and used the hospital provider fee to fund Medicaid and PeachCare.

Sen. Jeff Mullis, R-Chickamauga, said the new fees will benefit taxpayers who now pick up the cost for those who use state services at low, outdated prices or even free of charge.

The hospital provider fee will protect Medicaid funds for health care for children and the poor, said Sen. Don Thomas, R-Dalton.

Other legislators, including Sen. Preston Smith, R-Rome, say a hospital fee still is money out of taxpayer's pockets. He lost his chairmanship of the Senate Judiciary Committee after opposing hospital provider fees, Sen. Smith said.

"I'm opposed to all tax increases," said Rep. Martin Scott, R-Rossville. "If you're going to raise the fee, you should lower the taxes."

House Bill 1055 does just that. In one day, the hospital fees were tacked onto the generally supported user fees, with two large tax cuts sprinkled on top. Some legislators call the bill the Georgia Taxpayer Relief Act of 2010.

"When it became clear (hospital provider fees) wouldn't pass, the discussion centered around laying out policies that invest in Georgia's future," said Bert Brantley, Gov. Perdue's spokesman.

The two tax cuts gradually would eliminate the quarter-mill state property tax and retirement income tax for seniors. The cuts would go into effect in 2016.

"I was pleased to be able to support a couple of campaign promises I made: eliminating state property and retiree tax," said Rep. Jay Neal, R-LaFayette. "This will have a positive impact moving forward on economic recovery."

Sen. Thomas said the income tax cut "will help alleviate the financial burdens many experience in the latter part of their life." Sen. Mullis described the property tax cut as "a triumph" for property owners.

Rep. Scott said he voted against the bill on the side of caution. There wasn't a fiscal note attached to the bill to estimate the cost of the tax cuts, he said.

"It remains to be seen if the tax cuts will take effect over time," Rep. Scott said. "We don't know enough about the future to say, 'Let's raise taxes' and then just assume everyone will still agree years from now."

Those concerns are why some Democrats opposed the speedy construction of tax cuts into the user fee bill, which the Georgia Budget and Policy Institute called a fiscally irresponsible "last-minute tax giveaway."

The institute called for the governor to veto the bill and the budget, but Rep. Meadows said the hasty process is nothing new to the Legislature.

"Anybody knows at the end of the session all kinds of things are going on: Stuff put together, bills changed, stripped out," Rep. Meadows said. "You've got to be on your toes or all kinds of stuff will get through."

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