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Annual State Budget Drama Puts Taxing The Sick On Center Stage
“Without a measureless and perpetual uncertainty," goes a saying attributed to Winston Churchill, "the drama of human life would be destroyed.”
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| Democrat Sen. Robert Brown challenged the GOP?to unite on the hospital tax and leave his party out. |
By Maggie Lee / Staff
“Without a measureless and perpetual uncertainty," goes a saying attributed to Winston Churchill, "the drama of human life would be destroyed.”
Though removed from the great statesman's sphere, the comment easily applies to the smaller-stage uncertainty and drama of a late-session week in the Georgia General Assembly. This season, it's a show of more than 200 protagonists, divided into two teams, attempting to wrest from each other and state residents a few hundred million dollars to shore up the state budget.
They've got seven days to do it.
WAR GAMES
Enter Democratic and Republican legislators, lobbyists and Governor Sonny Perdue in the marble halls of the Gold Dome. Last Tuesday, they reconvened after the closing of the previous act: a frantic Friday Crossover Day, the last day of the year for one chamber or the other to pass all legislation, save the budget.
The state constitution stipulates Georgia balance its budget every year. It also mandates Crossover Day ten days before the legislative session ends, so that lawmakers will have time to focus on the budget.
Duly, the House scheduled several Appropriations Subcommittee meetings on Tuesday, to start to hammer out how to spend FY 2011 monies.
They were going to start drafting their checks based on some revenue bills they'd already OK'd, and handed over to the Senate.
But perhaps they did not suspect that offstage, Senate Democrats were practicing to press the red buttons.
The Dems had been nursing their ire because of what was doled out to their House colleagues on Crossover Day: nothing. Almost nothing anyway. Not even the measure that would let Clayton County vote itself a sales tax to pay for public transit. And with nothing on the table, the Dems had every reason to feel sour and little to lose by dragging their feet.
Yet on Tuesday, the House was blithely counting on GOP and Democratic cooperation in the Senate for its budget. As Rep. Wendell Willard (R-Sandy Springs) put it, "We were led to believe we have an understanding that we'll pass the [revenue] bills."
But that "understanding" unraveled like a cheap suit in a summer rainstorm.
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| The hospital tax is controversial, admits Rep. Chuck Martin, but failure to pass it and win the additional federal matching funds would put Georgia in a tenuous financial position, like California. |
SEARCHING FOR A VEHICLE: THE "SICK TAX" EMERGES
The other thing that happens after Crossover Day besides budget work is the search for "vehicles": bills still alive and able, by amendment, to convoy their comrades left behind.
One thing Senate leadership needed to find was a vehicle to carry one of those House revenue bills, a rather unpopular cash generator -- the so-called "sick tax" -- that would be levied on hospitals. It's projected to raise up to $170 million to help pay Georgia's rising Medicaid bills. And that's against a projected FY2011 budget that might be a billion dollars smaller than what the Governor recommends Georgia spend.
The "sick tax" comfortably passed the House. But something went awry on Tuesday about lunchtime; the House canceled all its appropriation meetings.
Hallway rumor had it that the House was mad because the Senate failed to rally the votes for the "sick tax", even carried in a relatively popular vehicle that would cut some business capital gains taxes as an attempt to stimulate the economy. Indeed, revenue contention was the problem, as House Appropriations Committee Vice Chair Rep. Chuck Martin (R-Alpharetta) explained it. Without knowing the revenue picture, which depends on the hospital tariff, "we can't very well pass the budget out."
If the House was mad, Senate Democrats blamed it on divided and vengeful Republicans.
BROWN SMOKING HOT
"Democrats across the state were threatened today by Republican leadership -- vote for the tax increase or we will kill funding for your local projects," alleged Sen. Robert Brown of Macon, leader of the Senate Democratic Caucus.
Brown pointed out that some Republicans had been complaining for days about federally imposed mandates and taxes -- like the new federal healthcare law -- but opined that the GOP is doing the same thing: causing tax increases.
As for the Georgia Senate vote, "Why do you need to shake down the Democrats when you hold the majority? Pass your own tax increase. Don't hide behind us," complained Brown.

A PLOT CONTRIVANCE?
Cut to the day of reckoning: Thursday, the last working day before a week's vacation. It would be the Senate's last chance to give the House a revenue picture for their vacation-time deliberations.
The Senate, a more collegial body compared to the House "mob," convened at a leisurely 2 p.m. The press crammed into the undersized gallery elbow-to-elbow, an unusual sight. They were gathered for the party duel: to pass or not to pass the hospital toll.
A warm-up bill came up before the main act but then the Senate president called a pause and announced the Democratic caucus would meet in Room 121 and everybody else would wait.
Several Republicans ambled into the free buffet in a side gallery. Democrats decamped to mysterious Room 121 -- numbered rooms on the first floor skip from 120 to 122.
Round two began slowly with the Democrats' return. The Senate first considered and then passed the stimulus bill, after removing its hospital tax rider.
The Democrats were handicapped, down some of their strongest fighters: Atlanta Sens. Nan Orrock and Valencia Seay had excused absences. Seay is currently in the hospital.
Sen. Ross Tolleson (R-Perry) rallied for the tax first, thundering that it can pull down federal money for the indigent care trust fund, which he said is a better alternative than what the governor threatens: cutting the Medicare provider rate.
Said Democrat Brown: "Lets call it what it is: a 'sick tax' forced on hospitals with threats of something worse...we were not at the table."
"This may be the least of their poisons but they're asking for it," Tolleson countered.
"Do you realize how much a provider tax cut would be detrimental to healthcare?" he asked.
Three amendments later, at about 7 p.m. Lieutenant Governor Casey Cagle, the head Republican who presides over the Senate, called a vote.
Pass: 33 – 15, with three Democrats voting with the GOP majority.
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| "You don't really know who to believe," especially as the legislative session gets shorter: a comment with a ring of truth from Sen. Dan Moody. |
SEQUEL: SONS AND DAUGHTERS OF HOSPITAL TAX
Thus the legislature taps one new revenue stream.
In the days after Easter, they'll probably have to tap some more, though maybe in a less public way.
For one, Governor Perdue's idea to sell some profitable loans held by the state isn't meeting with a warm reception. He wants to sell loans held by Georgia Environmental Facilities Authority, which makes water and sewer works loans to county and municipal governments. Perdue thinks the sale could net about $288 million.
Rep. Chuck Martin said he's "not a big fan of selling it." Senate Appropriations Sen. Dan Moody (R-Johns Creek) is noncommittal: "I'm looking forward to that debate. I'm not taking a position yet."
State revenue predictions say some tax receipts will start to pick up this year, though by this time next year, the state will probably still be working with less money than it wants.
Remember, said Martin, "as state revenue goes up the first, say, one-and-a-half billion we need to backfill the federal [stimulus] money." That's to say, make up for what the stimulus money bought this year.
Moody, who's learned something on his last seven budgets, promised a happy ending. "What we're going through is typical … it's the nature of the beast." But once the budget is in hand, "we can turn it around pretty fast."
Problem is, the Georgia expenditure beast has an insatiable appetite, but the revenue main course being served up is not very satisfying -- or palatable, these days.
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