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April 7,
2004
SINE DIE
Legislators worked hard today – many without sleep from the
night before due to long negotiations on the State’s FY 2005 Budget. There were
many lawmakers, lobbyists, and staff wandering the halls of the Capitol today
looking weary and sleep-deprived. Some of the University System of Georgia’s
lobbyists were still in their same clothes, unshaven and tired on the 4th Floor.
The “Budget” room looked like a bomb had been dropped – food, Krispy Kreme
boxes, newspapers, and other trappings from days’ worth of “living” in that room
by various lobbyists waiting on the Budget Conferees made for a rather nasty
space. Nonetheless, when Budget Conferees apparently reached an agreement early
this evening on a Budget, lobbyists were cheering – thankful that negotiations
had not fallen through and a Budget would reach the Chambers prior to the
dropping of the gavels.
All had heard rumors that Governor Perdue was unhappy with the proposal. The
Governor was waiting on negotiators of the Indigent Defense legislation as it
had proposed fines which help fund the Indigent Defense Council as well as
perhaps generate additional revenues for the State. The Indigent Defense bill
Conferees apparently did not get their proposal back to the House and Senate
Floors to reach final approval prior to the gavels dropping at midnight. This,
according to the Governor’s staff, will create a “hole” in the State’s Budget of
at least $57 million. Thus, the Budget will not be in balance and Georgia’s
Constitution requires a balanced State budget.
To make matters worse, Governor Perdue was not happy as much of his own agenda
had stalled. He did not get a faith-based initiative passed (so that religious
and sectarian groups may provide social services in the community with the use
of State monies) and he did not see passage of his comprehensive ethics reform
bill. For some unknown reason, which many believe is an election ploy, Governor
Perdue has now decided that tort reform was an important issue to him and
lawmakers’ failure to negotiate a compromise on that legislative discussion by
midnight will now cause him to also add this to a “special session” agenda.
Thus, he too feels that lawmakers need to address such. At midnight on April 8,
2004, he announced that he intended to call a Special Session so that the
Budget, faith-based initiative, ethics reform, and tort reform may be addressed.
Note too that in a time when the State’s Budget is suffering from “hard times,”
he wishes to expend more State monies just to get his agenda “handled” and
perhaps keep Democrats, and even fellow Republicans, from fund raising and
campaigning for re-election for their offices. To call this Special Session
means that the State must expend approximately $40,000 - $45,000 per day to have
the staff it needs to operate such.
Tort Reform
What seemed like a tort reform funeral (i.e. HB 1038) last night may actually
turn into a rebirth of sorts, if the Governor adds tort reform to the call for
the Special Session. The Tort Reform Conference Committee negotiation went on
all day yesterday, with Legislators, Lobbyists, and Conferees working on various
versions of the bill’s contents. There was actually agreement on new expert
witness qualifications for medical malpractice cases that would apply to the
affidavit expert and the witness at trial. Such expert witness provisions,
however, would not extend to other cases. This compromise involved a set of new
procedural rules that would allow medical records to be swapped early in the
process so that a plaintiff could find an expert meeting the stricter
qualifications, but the defense wouldn’t have to answer complaints until this
expert was identified.
Our understanding of the “breakdown” in passing meaningful tort reform was that
the Senate insisted on several other provisions that the House was not willing
accept. Senate Conferees wanted to include caps on non-economic damages in
medical malpractice cases, the federal Daubert standard for all professional
experts, and the elimination of joint and several liability for all tort cases.
The House was willing to agree to a post-judgment apportionment of fault with a
right of contribution among joint tortfeasors, basically a type of bifurcated
decision making process which did not eliminate joint liability. Further, the
House also expressed interested in requiring mediation in all medical
malpractice cases.
The House position also included support for a bond financed insurance authority
that would help insure directly or purchase insurance for small hospitals and
their physicians. The physician insurance company, MAG Mutual did not want to
agree to this novel, but untested idea, if it could offer product to physicians
also. Caps on non-economic damages had not passed the Senate in its version of
the bill, but the Senate Conferees kept this on the table and it became the
“poison pill” in resolving other issues.
By the end of the evening, the Senate was offering caps of $1.25 million, at
which level they could be politically palatable. However, lawyers in the Senate
became charged by the discussions and as a result, made a procedural motion to
“discharge” the appointed Senate Conference Committee after 10:00 p.m.
Basically, the Senate felt that its Conferees were not negotiating (what many
believe is that the Trial Bar yet again made a strategic move to eliminate
further discussion of the issue as it did not wish to see any reforms passed).
Thus, Sen. Seth Harp and others invoked Senate Rule 156(b), which is rarely used
and in most instances when such is used, new Conferees are appointed.
Apparently, no new Conferees were appointed by the Senate. Thus, negotiations
broke.
Budget
HB 1181 made it through the process last evening but only after protracted and
contentious discussions. Lawmakers agreed to the Conference Committee Report
presented. Due to the lateness of the hour, Appropriations Committee
presentations in each Chamber were relatively brief followed by little
discussion. Highlights of the Budget as passed by the House and Senate:
Dept. of Community Health
Governor Perdue had proposed to implement a fixed fee reimbursement methodology
for Ambulatory Surgery Services provided in an outpatient hospital setting with
a cut in State monies of $9.5 million. While House Members had halved that cut
in State monies, the Senate had restored the full cut. Conferees kept the cut of
$9.5 million but revised the language so that it will read “revise hospital
outpatient payments to 85.6% of hospital outpatient costs, effective July 1,
2004.” This will be a cut of approximately $24.4 million with federal monies.
Governor Perdue had also proposed to implement a supplemental drug rebate
program for all drug classes and include the Texas Implementation of Medication
Algorithms (TIMA) guidelines for treating schizophrenia with a savings of State
monies of $9.3 million to be realized. House and Senate Conferees thought that
the State could come up with more of a savings perhaps and went along with the
House proposal on this issue by realizing a savings of $14.8 million. However,
Conferees changed the language to read “implement a supplemental drug rebate
program for all drug classes; include coverage without restriction of at least
one drug from every therapeutic chemical class as approved by the FDA.” With
this change, Conferees believe that approximately $43 million can be saved.
Average Wholesale Price (“AWP”) discount for prescription drugs was proposed to
be increased from 10% to 12%. Apparently, House pharmacists balked at this idea
and won. This would have been a cut of more than $2.3 million in State monies.
Conferees agreed to move the AWP discount to 11% with a cut of $999,162 in State
monies.
Another proposal had been to eliminate the incentive fee for dispensing generic
drugs, except in situations where the pharmacist, via consultation with the
prescribing physician, converts a written prescription from brand to generic
status. This would have been a cut of $1.9 million. Conferees went with the
House idea on this item and proposed a savings of $4.27 million by continuing
the generic incentive fee program and increasing generic utilization from 50.5%
to 51.5%.
Conferees also agreed that no premiums should be required for participants in
the Katie Beckett Waiver program, the program to help medically fragile children
(the Governor had thought that the Dept. could generate a savings of $1.5
million by implementing these premiums on participants).
On PeachCare, originally a proposal was to implement a premium payment structure
based on income for members covered. After much negotiation, including scrapping
the Senate’s proposal to institute a policy on eligibility following the month
of eligibility (rather than immediately); a three-month lock out from
participation for non-payment of premiums; and a six-month lock out on voluntary
parental dropping of other healthcare coverage in order to access PeachCare, so
that Conferees decided to implement a sliding scale premium payment structure
based on income for members covered by this program with a family cap of $70
(this will supposedly be a savings of $11,005,833 in State monies).
Conferees restored the elimination of optional services for adults in the Adult
Dental Program (this was proposed to be eliminated by the Governor for a savings
of more than $5.6 million).
Conferees also decided not to eliminate the optional services coverage for
adults in the Medicaid Orthotics and Prosthetics program. This would have
supposedly been a savings of $3.2 million.
On eligibility issues, Conferees moved the federal poverty level criteria change
for pregnant women and children. The Governor had proposed this to be eliminated
for those with incomes exceeding 185% of the federal poverty level. Conferees
moved this from 235% to 200%.
The big ticket item in Medicaid was the increase to State funding for Medicaid
benefits in order to fund the projected cost of incurred claims for prior years
and the projected cash need for FY 2005 claims. The Governor had proposed $376
million. The House came back with $286 million while the Senate proposed $345
million. This number caused a lot of heartburn for Conferees. House Members
argued that the General Assembly had always had to “adjust” this number in its
mid-year budget so it wished to use less money for this item and the monies on
other items (i.e. education). Senate Members insisted on funding Medicaid. In
the end, $368 million was proposed by Conferees (as of late Tuesday evening, the
last number on the table had been $370 million). With federal monies, this will
be more than $926 million.
Conferees also agreed that a savings of more than $1.8 million could be made if
the Dept. implemented a targeted case management program for frequent users of
emergency room services. The Governor has been seeking an HMO to address this
and has done a good bit of investigation on this concept. House Members balked
at that idea and proposed a PPO program. Senate Conferees did not like the PPO
idea. Conferees, however agreed to using a PPO program and to find $1.8 million
with this program.
Conferees also agreed that there should be no PPO program implemented on the
existing SOURCE sites for the provision of disease case management to members
with the highest Medicaid costs. This will be a savings of $985,946.
Dept. of Education
Governor Perdue had proposed to increase the Local Five Mill Share so that a
approximately $21.9 million would be saved for the State. The House proposed a
savings of $83.2 million; the Senate proposed approximately $34.2 million.
Conferees decided that $57 million could be found as a savings.
Governor Perdue proposed $1.3 million for increased funds for the development
and training related to the rollout of the revised Quality Core Curriculum.
Conferees settled on $1.2 million for this.
The big ticket item in this portion of the Budget was the proposal to continue
QBE (Quality Basic Education) formula funding for more than 5,000 classroom
teachers, counselors, psychologists, social workers, and other support personnel
and the related classroom materials. The House wanted almost $287 million for
this; the Senate wanted to expend $156 million. Conferees decided on
$204,008,472.
Dept. of Human Resources
The Governor proposed reducing the funding for regional tertiary care centers in
the amount of $450,000. The House had restored those monies in its version of
the Budget; the Senate proposed only a reduction of $225,000. Conferees decided
on the $450,000 funding reduction.
One item in this portion of the Budget which caused a stir in Middle Georgia was
the complete closure of the Craig Nursing Home at Central State Hospital in
Milledgeville. This was supposed to be savings of more than $1 million.
Conferees decided to enact this closure which would eliminate a number of jobs
and place a number of individuals served in this facility at risk.
The Governor proposed a 7% cut of grant-in-aid money to county health
departments. House Members proposed only a 5% reduction; and the Senate proposed
a 6% reduction. This original reduction would have been a cut of $4.6 million.
Conferees agreed with the deeper cut, the Governor’s proposal.
Initially, Governor Perdue had proposed an $11 million addition for the funding
of the initial development and implementation phase of the child welfare
computer system (known as SACWIS). Needless to say, both sides had other ideas
on this large item. In the end, rather than putting an amount certain, Conferees
agreed only to stating language of “yes” that the State would fund the initial
development and implementation phase of SACWIS.
The Governor also had proposed to transition 20 consumers with developmental
disabilities from hospitals to community services (compliance with the Olmstead
decision). This would be an added cost of $1.16 million. The House disagreed and
asked that consumers remain in hospitals. The Senate and Conferees agreed with
the Governor so that these monies will be added to make this transition.
Board of Regents
Governor Perdue proposed reducing funding for Public Service Institutes and
elimination of funds for the Center for Trade and Technology Transfer. This
would have been a cut of more than $4 million. Conferees restored partial
funding for the following Public Service Institutes: University Press; Georgia
Center for Communications; Georgia Teacher Center; Center for Trade and
Technology Transfer; Small Business Development Center; Fiscal Research;
Institute of Higher Learning and Carl Vinson Institute of Government. Thus, only
a cut of $3.18 million will be made.
Governor Perdue also proposed a $15.5 million reduction for Special Funding
Initiatives. The Conference Committee proposed a $12.8 million cut with an
additional $200,000 for Macon State College.
Georgia Public Library Service and Public Libraries were originally proposed to
be cut $2,194,906. Conferees lessened this cut to $1,844,906. Also, the Governor
had originally proposed funding of $1,250,000 to fund the Georgia Public Library
Service for PINES to maintain statewide materials-sharing operations. Conferees
only agreed to provide $900,000 for this.
A new item put in place by the House was $2 million to provide funding for
federal land grant match. Conferees decided only to add $1 million for this.
Dept. of Technical and Adult Education (Unit A)
Conferees agreed to provide $7.9 million to fund instructional personnel to
preclude additional reductions in technical colleges, $7,053,970; Adult
Literacy, $583,260; Regents Program, $148,321; and Area Schools, $116,887.
Other Legislation Update
On the House side, it finally agreed to the Conference
Committee Report on HB 1325, another bill dealing with the HOPE scholarship
program. This measure cleared the House by a vote of 164 to 3. It proposes the
implementation of a new grading system to determine a student’s HOPE
eligibility. Currently, standards allow students with an overall "B" average to
earn the scholarship; new language was added to address numerical scoring of
grades on a 4.0 scale, and would require an overall 3.0 GPA for HOPE
eligibility. This would be phased in over four years to give students and
schools time to adjust. This change will save HOPE more than $100 million.
Checks on GPA averages would also be done at regular intervals such as 30, 60,
and 90 semester hours to prevent students from taking fewer classes to delay
their regular check points. Finally, this Conference Committee Report reflects
an agreement to freeze fee payments from the scholarship fund at current levels.
This Report also outlines a three-tiered mechanism relating to expenditures. The
first trigger would be instituted after the first year in which HOPE
expenditures begin to outpace lottery collections. This trigger would decrease
book payments sent to HOPE recipients from $300 to $150 per year. If there is a
second consecutive year of decreasing funds, the book payments would be
eliminated except for poor students who qualify for federal Pell education
grants. The third trigger would take effect after the program is three years in
the red; this would cause a total elimination of fee payments from the HOPE
scholarship fund.
Legislative help was given today to the City of Atlanta to
address its publicized sewer woes. Unfortunately, prior Atlanta administrations
failed to update Atlanta’s sewer system to address its growth needs. This lead
to insufficient sewer capacity and other problems, including waste water being
dumped into the Chattahoochee River. Mayor Shirley Franklin has worked
tirelessly, and has been seen at the Capitol on a number of occasions, on this
issue and has shown a commitment to undertake improving Atlanta’s inadequate
sewer system. Estimates of money needed to deal with the issue are perhaps $4
billion. Atlanta also has serious financial strain, and cannot afford the
repairs without an additional revenue source. HB 1612, which proposed to allow
the city to raise the necessary money by holding a referendum and passing a
Special Purpose Local Option Sales Tax (SPLOST) dedicated to funding sewer and
water system upgrades, was introduced but failed to make it out of the Senate.
This brought about a Conference Committee report on HB 709. The City of Atlanta
would have the option of passing a city resolution calling for a referendum to
create a local sales tax to pay for sewer upgrades. Once the city has passed a
resolution, Fulton County would have ten days to decide whether to call a
county-wide referendum. If the county chooses to do so, the city and county
would split the funds generated from the tax according to population. Should the
county refuse to call the referendum, Atlanta would be allowed to hold a
city-wide referendum to create a SPLOST which would only be levied inside the
city limits. This proposed SPLOST would be allowed to exist for a term of four
years, but could be renewed, by referendum vote, twice more for a maximum of 12
years. These funds would be required to be spent on upgrade and maintenance
projects for the city's sewer and water systems. Also included in this bill is
some language for a $50,000 exemption for ad valorem taxes for a disabled
veteran’s home. The conference committee compromise on HB 709 was passed by a
vote of 127-34.
SB 347 also cleared the House Floor today. This bill, brought
at the request of Lt. Governor Taylor, provides for reciprocal exemptions in the
levy and sale of homesteads in satisfying foreign judgments.
SB 147, Sen. Adelman’s bill dealing with Family Violence
Shelter Confidentiality Act, passed the House. It was amended greatly from how
the legislation cleared the Senate, stripping out the fines including
replacement of a family violence shelter if a company discloses the shelter’s
location. SB 147 puts into place measures to ensure confidentiality breaches do
not occur. It proposes to require that companies which publish directories
(electronically or otherwise) including, but not limited to telephone companies,
file with the Georgia Public Service Commission (GPSC) on or before January 1,
2005 a plan which describes the manner in which those companies will keep
confidential the location of family violence shelters. Such plans must be
updated at least every two years. The bill also requires that copies of those
plans be served on the Georgia Commission on Family Violence (GCFV) and allows
the GCFV or individual shelters to file comments with the GPSC regarding those
plans. The GPSC may only approve those plans if such are reasonably effective in
keeping shelter locations confidential. GPSC has the authority to impose
penalties for violations of the law.
SB 513, which amends the law in Chapter 12 of Title 31 on
selling and dispensing contact lenses, cleared the House by a vote of 138 to 1.
No amendments were made to the bill. It proposes that such be sold only by
licensed providers such as an optometrist or ophthalmologist and also brings
Georgia’s law into compliance with federal law on such dispensing. Any violation
found where a person is violating these provisions would be guilty of a felony
with punishment of one to five years and/or a fine of up to $10,000.
HB 539 cleared the Senate Floor. This bill, by Rep. Harbin,
amends O.C.G.A. § 33-28-3 concerning standard non-forfeiture provisions for
individual deferred annuities in order to provide for the calculation of minimum
non-forfeiture amounts and minimum interest rates (not less than 1% and not more
than 3%).
HB 208 cleared the Senate. Rep. Fludd offered this
legislation amending the Property Owners’ Association Act. The legislation was
changed on the Senate Floor and the House insisted on its position. A Conference
Committee was appointed. The Senate adopted the Conference Committee Report.
Rep. Harbin’s bill, HB 1348, permitting insurers to provide
food or refreshments under certain circumstances to current or prospective
clients during sales presentations and seminars provided that no insurance or
annuity applications or contracts are offered or accepted at such presentations
or seminars, also cleared the Senate. Initially, the Senate tabled the bill but
it was brought back off the table and passed.
Reps. Jamieson’s and Bannister’s bill dealing with SPLOST ran
into some difficulty in the Senate in the waning hours. The bill amends Part 1
of Article 3 of Chapter 8 of Title 48 of relating to the special purpose 1
percent sales and use tax. It proposes to require annual publication of certain
information regarding collection and expenditure of the proceeds of such tax.
The Senate added an effective date of July 1, 2004. The House had proposed this
become effective upon approval of the Governor. Both the House and Senate passed
the bill; in the end, it would appear that neither agreed to the changes made
and no Conference Committees were appointed to resolve the differences.
Rep. Fleming’s legislation amending O.C.G.A. § 9-13-80
relating to executions being cancelled when satisfied and private rights of
action passed the Senate. The legislation proposes to provide specific deadlines
(30 days after the satisfaction of the debt) and remedies for cancellation of
record of fully satisfied judgment executions. In addition it provides for
attorney’s fees and alternative methods to cancel fully satisfied judgments.
There are also provisions to allow for an attorney affidavit (when the
satisfaction is lost or misplaced) as well as penalties when these instruments
are not cancelled properly (imprisonment of up to one year and fines between
$1,000 and $5,000).
The Senate also passed HB 1512 which amends O.C.G.A. §
43-9-6.1 concerning the Board of Chiropractors’ duties: “The board is authorized
to: (1) Adopt, amend, and repeal such rules and regulations not inconsistent
with this chapter necessary for the proper administration and enforcement of
said chapter; (2) Examine, issue, renew, and reinstate the licenses of duly
qualified applicants for licensure to practice chiropractic in this state; (3)
Deny, suspend, revoke, or otherwise sanction licenses to practice chiropractic
in this state; (4) Initiate investigations for the purpose of discovering
violations of this chapter; (5) Conduct hearings upon charges calling for the
discipline of a licensee or on violations of this chapter; (6) Issue to
chiropractors, licensed under this chapter, certificates under the seal of the
board evidencing such licensure and signed, either by hand or facsimile
signature, by the president of the board and the division director; and (7)
Expunge or delete from the disciplinary record of any licensee infractions not
defined as immoral and unprofessional conduct or reasonable care and skill.”
Other News
Tonight, amid the various bills flying from Chamber to Chamber to be finally
resolved, a number of farewells were given. Some appeared joyful while others
were tearful. Here is a listing of Legislators who are known to be leaving the
General Assembly:
Sen. Chuck Clay (seeking a Congressional seat)
Sen. Mike Crotts (seeking a Congressional seat)
Sen. Nathan Dean (retiring)
Sen. Tim Golden (retiring – although he may be reconsidering his decision)
Sen. Robert Lamutt (seeking a Congressional seat)
Sen. Tom Price (seeking a Congressional seat)
Sen. Mary Squires (seeking a United States Senate seat)
Sen. Connie Stokes (seeking a Congressional seat)
Sen. Charlie Tanksley (redistricted out of current seat due to residency
requirement)
Sen. Nadine Thomas (seeking a Congressional seat)
Rep. Ken Birdsong (retiring)
Rep. Mike Boggs (seeking a judgeship)
Rep. Barbara Bunn (retiring)
Rep. Brian Joyce (retiring)
Rep. Barbara Mobley (running for judgeship)
Rep. Teresa Greene-Johnson (running for DeKalb County CEO)
Rep. Larry Walker (retiring)
Rep. Lynn Westmoreland (seeking a Congressional seat)
If you have any questions regarding this Report, please contact Stanley S.
Jones, Jr., Jeffrey C. Baxter, or Helen Sloat.
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