Capitol Updates

ACEC Georgia Capitol Update – Week 2

January 24, 2022

Last week, the Georgia General Assembly took its customary break from legislative days for the joint House & Senate Appropriations Committees to hear presentations from various state agency heads on their portion of the Governor’s proposed budget. The Governor kicks things off with an overview of any significant changes from the previous year’s budget, while also highlighting his new initiatives and budget priorities. Some of our readers may already be familiar with the Governor’s recommendation to increase overall spending by 11%, a move that’s made possible by the $3.7 billion revenue surplus in the fiscal year that ended June 30, 2021, as the result of an increase in tax revenues and federal COVID-19 relief funding. The $3.7 billion surplus does not include the last half of calendar year 2021, where tax revenues in December 2021 alone were up 24.3% from December 2020’s totals.

The Governor’s major proposals include:

A $2,000 pay raise for schoolteachers and school staff
A $5,000 pay raise for all state employees
A tax refund for Georgia taxpayers in the amount of $250 for single filers and $500 for joint filers
$600 million for new prisons
Millions for funding health care and mental health programs
A cost-of-living raise for retired state employees—the first in more than a decade

The state’s economist, Dr. Jeffrey Dorfman, also gave his annual report during the joint committee hearing. Dorfman’s presentation included the following observations and predictions:

Personal income has increased by 8% from before the COVID-19 pandemic
Georgians have saved an extra $75 billion since the beginning of the pandemic
Consumers added much less debt during the pandemic, noting that “This was the first time in American history we had a recession when credit card debt went down and credit scores went up”
Inflation should begin to fall slowly over the next several months

Dorfman predicted that the state may experience slower growth over the next fiscal year as most Georgians are no longer receiving direct federal payments that supplemented consumer spending. This slowing of the economy, however, will be augmented by the extra savings and personal income increase. Dorfman was clear in his remarks that the likely slowing of the economy is not a recession prediction—and that the odds of a recession are low in 2022—it is simply a projection that the current booming economy will likely fall to a more normal pace. Further, the reduction in spending may have the added effect of assisting with the inflation issue and lowering prices.

The (much) better half of ACEC Georgia’s President, Rebecca Sullivan, was one of the state agency heads making a presentation during budget week, thanks to Governor Kemp recently appointing her as Commissioner of the Department of Administrative Services. You can watch her presentation here, starting at 7:20:00 (she really knocked it out of the park).

Budget Highlights for the Amended FY 2022 Budget

Every year, the Georgia legislature deals with two separate budgets. The amended budget for FY 2021 offers the Governor and legislature an opportunity to adjust spending levels for the current fiscal year (ending June 30^th) to reflect actual tax collections and spending changes over the course of the year. The following are new recommendations for the current fiscal year:

Department of Community Affairs

$112 million for land acquisition and development in support of the Rivian, Inc. economic development project.

OneGeorgia Authority

$1.7 million for the cost of the Lake Allatoona storage agreement with the Army Corps of Engineers to increase water supply capacity of local water service providers.

Natural Resources

$2.7 million for the increased cost of the Lake Lanier storage agreement with the Army Corps of Engineers, initially funded in FY 2019 and executed in January 2021.

MOBILE GEORGIA

$56 million for transportation projects per HB 170 (2015 Session).
$9.8 million for transit projects per HB 105 (2020 Session).

Department of Transportation

$1 million one-time funds for purchase of a replacement ferry for Sapelo Island.

Technical College System of Georgia

$19.4 million for various capital improvement projects, including $5.8 million to equip the aviation training academy at Chattahoochee Technical College.

Budget Highlights for the FY 2023 Budget

The FY 2023 Budget (or the “big budget”) is the budget for the full fiscal year beginning this July 1 and ending June 30, 2023. The following are recommendation highlights:

Department of Transportation

Capital Maintenance Projects
- A $19 million increase in funding for resurfacing projects
- A $66 million increase in funds for the Transportation Trust Fund to reflect FY 2021 collections of the Hotel/Motel Excise Tax and Highway Impact Fees pursuant to HB 511 (2021 Session)
Intermodal Programs:
- $16 million dedicated to support the new Airport Aid program
- $19 million dedicated to support the new Transit program
- $444,000 dedicated to support the new Rail program
- $1.3 million dedicated to support the new Ports and Waterways program
$4.8 million increase to local Capital Outlay improvement grants

Technical College System of Georgia

$1.2 million to establish High-Demand Career Initiatives and expand apprenticeship programs across the state
$33.3 million to restore previous austerity cuts and expand instruction of Allied Health, Commercial Truck Driving, and Manufacturing programs in strategic locations to support critical workforce needs across the state.
$38.6 million in bonds for design and construction projects at various TCSG institutions.
$6.2 million to design a new Quick Start Training Center facility to support the expansion of the electric vehicle industry in Georgia.
$5.3 million for customized training and recruitment operations to support the expansion of the electric vehicle industry in Georgia.

MOBILE GEORGIA

$48.8 million for the Department of Transportation to reflect FY 2021 motor fuel revenue collections.
$20.9 million for the Transportation Trust Fund for transportation projects as a result of HB 511 (2021 Session).
$8.2 million for the Georgia Transit Trust Fund for transit projects as a result of HB 511 (2021 Session).

You can read the full budget and recommendation highlights here.

House Committee Leadership Changes

The Speaker of the House, Representative David Ralston, announced new leadership posts within the Georgia House of Representatives:

Banks and Banking – Rep. Noel Williams (R-Cordele) will preside as the new Chairman of the committee. This committee is primarily responsible for financial institutions, property finance, and corporate securities law. Former Chairman Greg Morris was tapped to replace Don Grantham on the Georgia Department of Transportation’s State Transportation Board last March.
Code Revision – Rep. John LaHood (R-Valdosta) will serve as the new Chairman of the committee. This committee is primarily responsible for cleaning up outdated code (i.e., modernizing Georgia law or statute), correcting errors or omissions, and revising technical or grammatical issues in Georgia’s law. The former Chair of the committee, Rep. Tim Barr (R-Lawrenceville), announced last year that he is running for the U.S. Congressional District 10 seat currently occupied by Congressman Jody Hice, who is running as a primary opponent to Secretary of State Brad Raffensperger.
Legislative and Congressional Reapportionment – Rep. Houston Gaines (R-Athens) will serve as the new chairman of the committee responsible for redistricting or redrawing Congressional and Legislative seats. Former Chair Rep. Bonnie Rich (R-Suwanee) was recently elected as Majority Caucus Chair of the House and as such, cannot serve as chair of a committee while in leadership.
Special Committee on Election Integrity – freshman Representative Stan Gunter (R-Blairsville) will serve as the new Chairman of the committee responsible for voting reforms, replacing the previous chair, Rep. Barry Fleming (R-Harlem).
Creative Arts & Entertainment – Rep. Kasey Carpenter (R-Dalton) is the new Chair of the House committee responsible for legislative initiatives relating to Georgia’s ever burgeoning film and entertainment industries.
The following have been appointed as vice-chairs of the respective committees:
- Rep. Marcus Wiedower (R-Watkinsville) is the new Vice-Chair of the House Transportation Committee.
- Rep. Mandi Ballinger (R-Canton) is the new Vice-Chair of the powerful Rules Committee, which is the committee responsible for setting the calendar of bills for debate on the floor of the chamber.
- Rep. Beth Camp (R-Concord) is the new Vice-Chair of the Juvenile Justice Committee, which deals primarily with judiciary matters as they related to juveniles.
- Rep. Tyler Paul Smith (R-Bremen) is the new Vice-Chair of Judiciary Non-Civil Committee, which is responsible for any legislation that deals with criminal offenses or criminal penalties.

The Week Ahead

The legislature will meet today for Legislative Day (LD) 5. The current legislative calendar goes through Wednesday (LD 7), so this week the legislature will have to pass a new adjournment resolution to schedule more legislative days past Wednesday.