FOR IMMEDIATE RELEASE – March 12, 2010

Contact: Sen. Tim Golden, 404-656-7580 or tim.golden@senate.ga.gov

Governor's plan would devastate rural health care

By Sen. Tim Golden

Taking dead aim at Georgia’s financially struggling hospitals, Gov. Sonny Perdue announced Thursday his plan to cut Medicaid reimbursement rates by 10.25 percent and eliminate a sales tax exemption for non-profit hospitals. These actions will cost hospitals a total of $274 million during fiscal year 2011.

The proposal is a continuation of the misguided strategies by the current governor and legislative majority in dealing with a state budget deficit that is now estimated at $2.4 billion for FY 2011. Previously, they cut another $281 million in Quality Basic Education funding from the 2010 supplemental budget and just last week ordered the Board of Regents to cut an additional $300 million from the University System budget for next year. Earlier this week, it was revealed they will eliminate the back-to- school sales tax holiday, an initiative that helps working families and Georgia businesses and, according to studies, has a positive effect on state revenues.

It is most unfortunate that those in control of the budget process are shirking the state’s responsibility to educate our children and damaging our health care system without even considering proposals that would bring in hundreds of millions of dollars in additional revenue – without raising taxes. Valdosta and other Georgia cities participated in a pilot program for the local collection of sales taxes and showed the state was failing to collect sales tax revenue that consumers were paying but was going unreported.

The state is losing up to $1 billion per year because the Department of Revenue in this administration has been unsuccessful in cracking down on sales tax cheating. Legislation that would authorize local governments to collect sales taxes and help make up for these losses has been stuck in committee since last year because of partisanship by the legislative majority. Meanwhile, the people of Georgia continue to suffer. (Click here to see my interview with CBS Atlanta, along with Rep. Calvin Smyre, on the Georgia budget crisis.)

The governor’s new plan to slash Medicaid reimbursements and charge a sales tax on non-profit hospitals is apparently an angry response to the health care community’s strong opposition to his previous proposal to impose a 1.6 percent tax increase on all hospitals. This proposal will likely draw similar opposition because of the devastating effect it would have on health care facilities across the state, including many rural hospitals already on the verge of financial collapse.

Also Thursday, the governor announced he is shifting $342 million in federal stimulus funding from the FY 2011 budget to the current year’s budget, in the wake of February’s revenue report that showed a 9.9 percent decline from the previous year. Georgia’s tax collections have now fallen for 15 consecutive months.

Reducing Judges: In perhaps the most ridiculous proposal of the 2010 session, legislation has been introduced which would eliminate 19 Superior Court judgeships across the state, including one here in the Southern Judicial Circuit. SB 485 would have a miniscule cost- saving effect, but a major negative impact on law and order, public safety and the ability of Georgia businesses to resolve disputes. Over the past five years, Superior Court caseloads have increased by 20 percent. Civil filings are up by 50,000 from 2004 to 2008. Almost all county jails are at or over capacity, and the number of inmates awaiting trial has increased by 4,000 since 2004. The entire judicial system accounts for less than 1 percent of the state budget. This proposal, which would do nothing but slow down the administration of justice in Georgia, should be rejected as soon as possible.

Property Tax Reform: There was some good news for taxpayers in the Senate this week. SB 346, a property tax reform measure that would assure that all property owners receive an annual tax assessment notice, was approved unanimously Thursday. Taxpayers would also receive information on when to file an appeal and have 45 days to do so. SB 346 now goes to the House of Representatives for its consideration.

Water Conservation: Legislation calling for increased water conservation measures cleared the Senate unanimously Wednesday. SB 370 would establish new rules for public water systems, stronger efforts to plug leaks and new standards to require high-efficiency plumbing fixtures. The measure is intended to help Georgia resolve its water dispute with Florida and Alabama, in response to a federal judge’s ruling that threatens the cutoff of water withdrawals for metro Atlanta from Lake Lanier. The House passed similar legislation the same day.

Sen. Tim Golden represents District 8 (Brooks, Cook, Lowndes and Thomas counties) in the Georgia State Senate. Contact him at 121-A State Capitol, Atlanta, Ga. 30334; by phone at 404-656-7580 or by e-mail at tim.golden@senate.ga.gov.