Elena Parent is having a town hall meeting at the Doraville Library 6:30-8pm Monday 23 Jan 2012. Now may be the most important time of the year to meet with your elected State representation. You can learn what the most likely important issues will be. You’ll also be learning at a time when you can best influence what happens on important secondary legislation.

Stuff like major tax legislation is big enough that the public weighing in at the last minute will influence the character and fate of the legislation. An large amount of significant legislation is enacted or rejected under the radar however.

Most disagreeable important secondary legislation, and most all legislation for that matter, is enacted at the end of the legislative session. Legislators three months after the session began become worn down, and by then it’s impossible for any legislator to fully know what they’re voting on. Lobbyists that are there day after day to fill the void with information provided by their clients when constituents don’t have an interest and legislators don’t have the time.

It’s not uncommon for legislation involving hundreds of millions of tax dollars to be a done deal before anyone other than lobbyists and the leadership the lobbyist focus on even know what happened. Hundreds of millions is big money, but its only a little as $20 per Georgian, so Georgians other than those paying attention aren’t likely to notice.

Take CAPCO for instance. I’d bet that more half of those in the House that voted for it didn’t know they were voting for a CAPCO. The press and “We the people” didn’t even have a whiff of it becuase it circumvented the Committee process and was attached at to what most everyone thought was benign housekeeping legislation. CAPCO legislation could’ve easily been approved by the Senate in the hectic last minutes of the Session, and most of them probably wouldn’t have know it either.  The result would have been the General Assembly approve giving away literally hundreds of millions of tax dollars, and without a majority of the General Assembly even knowing it!

There’s also lots of legislation denied or enacted at the behest of lobbyists simply because people don’t care, or don’t care enough, allowing legislators can get away with it. Take Sunday alcohol sales. Two–thirds of Georgians a half dozen years ago supported the idea the Sunday sales should be up to the locality, yet insiders and lobbyists kept the legislation bottled up for years (pun intended). Just recently lobbyists got the General Assembly to approve clear cutting trees on state ROW to improve billboard visibility, though I’d guess Georgians disapprove of it 3-2.

Legislator’s hearing from constituents early on can break that pattern.  Rank and file Reps and Senators can get a heads up on what’s important to constituents when they too may be able to influence the process.  When they can’t pay attention to everything they can at least pay attention to what’s important to constituents and constituents opinons about those matters.

The General Assembly is likely to enact what it will cal “tax reform” legislation in the 2012 session that will exempt Georgia manufacturers from state taxes on energy (electricity and natural gas). Isolated legislation of this sort isn’t “tax reform”, it’s a special interest tax exemption. Stop treating the Georgia electorate as if they’re dumb as dirt and call a spade a spade.

That said, I think exempting Georgia manufacturers from state taxes on energy is sound tax policy. Taxing energy used in manufacturing is in some measure double taxation. The cost of energy is included in the cost of the manufactured product, and subject to sales tax.  (That is unless there are special interest exemptions that exempt the product from sales taxes!)

I currently oppose the legislation even though it’s sound tax policy, because the General Assembly has already recently bestowed a very generous energy subsidy on large Georgia manufacturers. I’m referring to Senate Bill 31 (SB31) enacted in 2009 of course. SB31 required Georgia Power residential pay for new nuclear electric generating capacity at Plant Vogtle that won’t even exist for another five years, while exempting large industrial electric users from pre-paying.

SB31 isn’t a chump change subsidy. SB31 requires residential and small business ratepayers alone shoulder a $2,000,000,000 (that’s billion, not million) expense. And now the General Assembly wants to give away another $140,000,000 a year in electric  tax breaks to big industry?

SB31 is egregious legislation because it trashes the fundamental principle that utility ratepayers pay their share for what they use, when they use it. SB31 requires today’s typical Georgia Power residential customer to pay nearly $100 per year more for future electric capacity. The service life of the new capacity is probably 50 years or more, so most of us now paying for this capacity will be dead or gone before we can fully use what we’re paying for. (Corporations aren’t mortal however, so they’re positioned to reap the full benefit of new capacity, natch.)

The reasons for SB31 legislation was enacted are:

(1) General Assembly membership that subject to undue influence as a result of being wined and dined, and receiving other gifts from lobbyists. Read all about how the AJC at that time reported on Georgia Power buying and paying for SB31 here.

(2) General Assembly membership that “goes along to get along”, placing personal convenience ahead of constituents and sound policy.

(3) General Assembly membership so poorly informed it can’t recognize poor policy.

Lest the reader think my reasons bluntly harsh, remember SB31 was signed into law a mere eight months before House Speaker Glenn Richardson’s December 2010 resignation. Richardson you may recall was forced to resign only after the General Assembly’s “common knowledge” of Richardson’s adultery with a utility lobbyist became public information. (That’s not intended as an indictment of all serving at that time, BTW.)

My support for exempting Georgia manufacturer’s from state taxes on energy is contingent on:

(a) Repealing the state sales tax exemption on ice used in the production of poultry and vegetables. Here’s the 2004 legislation exempting ice.  The proposed legislation exempts energy used in the manufacture of ice, a major cost in the manufacture of ice, from state taxes. If poultry and vegetable producers don’t want to purchase ice and pay sales taxes like everyone else, they can manufacture their own ice using tax-free energy.

(b) Righting the wrong of SB31

How can the wrong of SB31 be righted? Enact legislation that:

(i) Immediately discontinues Georgia Power charging residential customers for Plant Vogtle.

(ii) Continues to assess the state tax on electricity used in manufacturing on those manufacturers that benefitted from the exemption from SB31. Apply that tax revenue toward Plant Vogtle until the SB31 commitment to Plant Vogtle funding is fulfilled, then sunset the tax.

Modifying the SB31 legislation won’t be fair to industry, but actions ought to have consequences. Large manufacturers paid their lobbyists to influence the General Assembly to exempt manufacturers from SB31 electric rates, when manufacturer’s lobbyists should have instead been fighting SB31.  Wrong choice. the consequence now being that manufacturer’s be taxed on electricity use until the SB31 travesty they lobbied to exempt themselves from is made right.

It’s not like manufacturere will be paying any more than they are now.  They’ll still get their special interest tax break.  They’ll simply have to wait a few years.  And to rebut the “jobs creation” mantra sure to accompany every special interest handout the General Assembly will consider, how many jobs were created by the SB31 handout?  None I’m aware of.  We don’t can’t know anyway, becasue the General Assembly rarely follows up on its giveaways.)

I’m calling on my House Representation to amend the special interest energy exemption legislation to repeal the state sales tax exemption on ice used in the production of poultry and vegetables, and right SB31. The amendments are unlikely to pass, but at least legislators that “go along to get along”, are subject to undue lobbyist influence, or don’t know enough about policy to be serving in the General Assembly, will again be a matter of record.

I attended a town hall meeting hosted by Georgia General Assembly District 82 Representative Scott Holcomb. District 81 was cut up in the “rational” and “equitable” redistricting that placed Doraville in two different General Assembly Districts for 2012 and beyond. The Metro Atlanta House Districts map is here. (Note the butchering of in other DeKalb County Districts.)  District 81 Representative Elena Parent and Rep Holcomb both reside in the new District 81. Northern Doraville is in the new District 79, Dunwoody.

Those in charge of redistricting thought it was rational and equitable to facilitate the re-election of District 80 Representative Mike Jacobs at the expense of Doraville being within a single House district. (Jacobs is pushing a quick incorporation of Brookhaven that may be damaging to DeKalb County as a whole.  The redistricting conveniently removed those most likely to be adversely affected by Brookhaven incroporation from his District, and replaced them with Fulton County people unlikely to care about DeKalb County.)

Below is an e-mail I transmitted to Rep Holcomb, and copied our Senator Millar and Representative Parent. There’s little new for those familiar with my opinions.

From: Dave Bearse
To: scott@repscottholcomb.com; Elena Parent; Fran Millar
Subject: Comments on Holcomb’s Thu meeting

Dear Rep Holcomb:

Thanks for taking five minutes at the end of the Evans Elementary School meeting to speak with me. I’m a constituent of Rep Parent and Senator Millar, so I’m copying them with my comments concerning the General Assembly session you spoke of at your Thursday meeting.

The eight topics you discussed were:

1 – Education
2 – TIA / T-SPLOST
3 – Immigration
4 – Criminal Justice
5 – Water
6 – Health exchange
7 – Brookhaven (in connection with a question session)
8 – Redistricting

Short remarks on each:

1 – Education. I was insistent you pick the topic for our few moments discussion because your selection can (but doesn’t necessarily) inform me about your priorities. The first of your seven topics in the meeting, and the topic you choose to discuss with me, was education. My conclusion is that education is likely very important to you.

2 – TIA / T-SPLOST. We desperately need transportation / transit spending. It’s a regressive tax that would have Fulton and DeKalb paying twice as much as other Counties. More than one-half of it will be used to fund highways which should be funded by motor fuel taxes. (I write more than one-half will be used for highways because the 15% returned to the Counties for use as they see fit will nearly all be used for highways.) Factor in that it’s likely the General Assembly will do nothing to create a fair and truly regional transit authority (beefing up GRTA as an umbrella organization doesn’t cut it), and my T-SPLOST opposition is adamant.

3 – Immigration. Your statement that you didn’t oppose HB87 on economic grounds stood out.

4 – Criminal Justice. Michigan has approximately the same 10M population as Georgia. GA currently has about 60,000 incarcerated. MI has about 43,000, down, from 51,000 a few years ago. MI is saving $300M a year because of reform with a 30% recidivism rate that is less than the 40% nation average per this Business Week column: http://www.businessweek.com/magazine/michigan-lets-prisoners-goand-saves-a-bundle-12012011.html It’s discouraging that it’s money, and not doing the right thing, that is driving Georgia to consider sentencing/prison reform.

5 – Water. I support reservoirs with the caveat they be approached VERY carefully in terms of both public water supply costs and benefits, and the environment. (New reservoirs are sure to be a haymaker for consultants, contractors, and selected others, so beware of sources of information!) I do not think prohibiting interbasin water transfer sacrosanct.

6 – Health Exchange. The Georgia approach of minimal action while hoping the ACA is struck down will likely result in Georgia’s system being half-arsed if ACA isn’t struck down, excuse my French.

7 – Brookhaven. I strongly agree the process needs to be slowed down, and more thought given to its results on the future of the county as a whole. I did not support requiring Countywide approval concerning the incorporation of Dunwoody. I’m reconsidering that as concerns Brookhaven because it’s appear to be a harbinger of a piecemeal approach that cannot produce the best results.

8 – Redistricting. Redistricting undertaken by politicians demonstrates the proclivity of politicians as people to serve themselves.

Enjoy that wild hog tomorrow!

Dave Bearse

Transportation. Look for subdued panic to reign if it continues to appear that the T-SPLOST will fail. Proposals to move the date from the July general primary to the November general election may resurface. The General Assembly lacks the leadership to engage in regional transportation transit reform. I expect window dressing transit reform legislation accompanied and promises to do more the 2012 elections. Yeah, right.

Tax Reform. The 2011 General Assembly leadership demonstrated that the most important principle of any Georgia tax reform is that it reduce income taxes and thus the relative tax burden on the rich. The proposed income tax cuts that came out of the back room so egregiously benefitted the rich at the expense of everyone else that even the Tea Party and Grover Norquist couldn’t stomach it.  Read what Citizens for Tax Justice said about it here.

Penal Reform. Georgia has one of the highest incarceration rates in the world with 60,000 in prison. Michigan has about the same population as Georgia. Michigan enacted reforms a few years ago that reduced its prison population by over 10,000 to a little over 40,000 today. Michigan’s recidivism rate is 30%. The national rate is 40% nationally. Michigan savings? $315,000,000 annually. The pity is that Georgia leadership won’t attempt reform because it’s the right thing to do—it’s all about the money if you haven’t figure that out based on my tax reform comments. Read more about Michigan reforms in Business Week here.

Unemployment benefits. Georgia borrowed $700,000,000 from the feds to pay unemployment benefits, and the debt is coming due. Georgia’s unemployment fund was not in the best of shape prior to the recession because General Assembly “fiscal conservatives” cut unemployment taxes on businesses in fat times. Now that it’s time to pay up, and the determination has been made that business won’t be shouldering its burden.  Unemployment benefits, education and who knows what else will have to be cut, and/or citizen taxpayers will be compelled to open their wallets.

Crazy Legislation. Don’t forget the usual crazy legislation that wastes time like drug testing and requiring the unemployed work 24 hours a week to qualify for unemployment benefits. The leadership lets it play some as it diverts attention from the backroom wheeling and dealing necessary to effect tax cuts for special interests and the rich. General Assembly representation will be running in new districts in November for what will be another decade of safe seats for most of ‘em, so expect more than the usual grandstanding.

Update: The AJC editorized about CAPCOs the day after this post.  Read it here.  Ben Harbin, the hack responsible for CAPCO legislation, actually wrote “The cash to invest comes from the private sector.”  A GOP that gives insurance companies $125,000,000 in state funds and then calls the gift ”private sector funds” cannot be trusted with tax reform.

The General Assembly will convene in early January. One item on the agenda will be CAPCOs.

CAPCOs are state government programs where private investment companies are given taxpayer money to make investments in small local businesses. Georgia SB203 would give $125,000,000 in tax credits (aka government handouts) to Georgia insurance companies to invest in CAPCOs. It’s ugly when General Assembly leadership stealthily creates a new program to hand out $125,000,000 to special interests.

A CAPCO bill stalled in the House in the 2011 session. House Insurance Member Ben Harbin then attached CAPCO legislation to unrelated Senate Bill 203 when SB203 was sent to the House for approval. (SB203 [bill here] was an insurance industry bill that had nothing to do with CAPCOs. It’s summarized as “Insurance; provide that certain individuals who collect/input data; automated claims adjudication system are exempt from licensure.) SB203 easily passed the House on the penultimate (next to last) day of 2011 session.

For those unfamiliar with Georgia’s legislative process, the last few days are a time when leadership often tells the rank and file, “trust us, it’s routine housekeeping legislation”. I’ll wager more than a third of those in House that voted for the legislation didn’t know they were voting for a CAPCO. (Remember the 2010 legislation exempting rich seniors from state income taxes to the tune of $100,000,000? It too was stealthily added to other legislation and passed on the penultimate day of the session.)

The CAPCO amendment to SB203 requires SB203 be returned to the Senate for approval. I understand the Senate may vote on SB203 without it being subjected to Insurance Committee review. It’s poor government that creates a new $125,0000,000 program without either Chamber of the General Assembly passing it through the Committee process, and the public not being given adequate time to weigh in, and the House not even knowing it voted to create the program.

Write Senator Fran Millar if you oppose CAPCOs and request he vote no on SB203. My e-mail to Senator Millar will convey my displeasure with this type of legislative process.

The holidays are here, so I’m beginning this post by plugging the Empty Stocking Fund, an 84 year old metro Atlanta charity the provides gift packages to underprivileged metro Atlanta children. I’ve made contribution a number of years because they’re an established local charity and endorsed by the AJC. Empty Stocking Home Page here.

I’ve always supported municipal employees owning homesteads within the municipality where they’re employed. I think that worthy of incentive, especially in the case of police. Local police living in the community increases security, and police home ownership increases police’ stake in the community.

Property tax relief in the form of a property tax credit would junk up the tax code, but a municipality could pay a holiday bonus approximating the value of homestead property taxes. City property taxes on a $100,000 homestead at 9 mils with a $25,000 homestead exemption are $135. Total homestead property taxes, including state, county and schools would be a little north of $1,000, a nice round number.

A full time police officer for a full year that owns and resides in a municipal homestead for that year could receive a $1,000 holiday bonus with presentation of the property tax bill(s) serving as documentation. Two years property tax bills would serving as the first time qualification, thereafter the most recent year’s bill if there’s no change in address. $1,000 is a significant incentive. And in the case of officers driving vehicles municipal home if that’s occurring, an incentive that shortens a commute can pay for itself. Reduce a 24 mile round trip commute to 2 miles. 22 miles at $0.20 mile is $4.40 / day = $22 per week. Multiply $22 by 48 weeks = $1,056.

The controversy surrounding the death of on-duty Doraville Detective Robert Wilson in a recent highway crash highlights a pet peeve of mine, special interest tax breaks. Georgia law provides property tax relief for the surviving family of law enforcement (and likely other emergency responders) killed while on duty.

That’s a special interest tax exemption. While the surviving family of emergency responders is a group deserving a benefit, it’s poor policy and practice to provide a benefit in the form of property tax relief. Hear me out.

It’s poor policy because it junks up the tax code, requiring extraordinary regulations and oversight that provides a benefit to a very, very small group of people. It’s poor practice because it provides larger benefits to ostensibly the most well-off surviving families, those with the most valuable homes. Surviving families that don’t own a home, perhaps the families in most in need of support, don’t benefit. Surviving families that lose their homes to economic hardship or sell for other circumstances (such as relocating to another state for employment or to be near other family), lose the benefit.

A superior approach would instead be Georgia funding (or increasing the insuruance benefit if such a benefit is in place) for line of duty life insurance for emergency responders. The tax code would be simplified. The state can obtain lower premiums than individuals or local governments. Local governments could perhaps piggyback on the policy to provide a larger benefit the basic state benefit. The surviving families receive the same benefit no matter their circumstances.

The General Assembly is likely to consider tax reform again this session. Simply stated, I don’t trust ‘em collectively any farther than I can throw ‘em if the forgoing special interest exemption is their collective idea of good tax policy. It junks up the state tax code is junked up with inefficient feel good legislation, and reflects state leadership that would rather do that than actually appropriate funds for insurance that would more fairly and efficiently provide a benefit.