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WEBINAR: New Small Business Bankruptcy via Chapter 11: Key differences versus traditional Chapter 11, 7, or 13 and how small business can use SBRA to reorganize

Gold Dome

January 24, 2020

Gold Dome Report - January 24, 2020

As budget week comes to a close and legislators prepare to return to normal chamber and committee proceedings next week, our team has picked out some highlights from the agency budget presentations for your weekend reading pleasure. Legislators were attentive and eager to ask for justification for cuts to the Governor’s AFY 2020 and FY 2021 budget proposals. Take a peek under the hood and see what concerns lawmakers had with the session’s most central priority in today’s #GoldDomeReport.

Lawmakers Conclude Initial Budget Hearings

Department of Education

Superintendent Richard Woods began his presentation noting the successes of the Department of Education and in particular Georgia’s all-time high graduation rate of 82 percent. He touched on a few barriers to quality public education that still exist for some students including, Poverty resource gaps in rural areas, shrinking tax base, an increase in high-need students, teacher recruitment and retention, high-stakes testing, and increased student mental health needs (according to his data, 11.3 percent of children have contemplated suicide over the last 12-month period)

Department of Education CFO Ted Beck walked legislators through the Department’s proposed budget. Originally budgeted $12,769,228,158 ($10,644,827,624 in State Funds) in FY20, the Amended FY20 proposal includes additions driven by enrollment growth totaling $138,480,964 (all State Funds) for DOE. The FY21 proposal budgets $13,040,840,680 ($10,916,440,146 in State Funds) in spending for DOE, an increase of $271,612,522 (all State Funds) from the original FY20 spending plan.

Questions from lawmakers included Sen. Mike Dugan’s (R-Carrollton) inquiry about a $1.1 million reduction in funding in the FY 2021 Budget for Residential Treatment Facilities, stating that he has two such facilities in his district. Sen. Dugan’s question focused on the reduction’s justification. Mr. Beck explained it was based upon a formula composed of total bed capacity, daily attendance, and other criteria.           

Rep. Robert Dickey (R-Musella) asked whether the Department saw teacher pay raises as a priority. Superintendent Woods indicated while the raises were a priority the Department’s priorities were formulated prior to the Governor’s budget report was finalized. Woods also indicated that DOE sees education as an “investment.” However, when asked if last year’s $3,000 raise had impacted retention, Woods stated that it is too soon to see effects reflected in data but educators around the state were enthused.

Rep. Rick Jasperse (R-Jasper) asked about funding for RESAs. He added that RESAs are crucial for rural districts and he is worried about the effect of these reductions. Superintendent Woods noted that the Department will continue an open dialogue with RESAs regarding funding.

Rep. Clay Pirkle (R-Ashburn) asked about the teacher raises. Specifically, he wanted to see information about how much of the funds allocated by the State for raises actually reach teachers versus administration officials. Mr. Beck indicated that was hard to distinguish because of how the funds are disbursed from the State to districts. 

Department of Human Services

Commissioner Robyn Crittenden first spoke about how DHS utilizes funding generally. She then pivoted directly into the Department’s budget. Originally budgeted $1,945,428,793 ($1,084,254,894 in State Funds) in FY 2020, the Amended FY 2020 proposal includes cuts totaling $46,415,882 ($21,012,360 in State Funds) for DHS. The FY 2021 budget proposes $1,888,401,024 ($1,056,098,099 in State Funds), this is a change from the proposed Amended FY 2020 of $31,609,065 for DHS.

Division of Families and Children Services Director Tom Rawlings described his agency’s budget as reasonable will allow DFCS to focus on its core mission. He added that the Division saw a record number of adoptions in 2019, totaling over 1,400. DFCS they eliminated funding for 30 vacant positions at the state and regional levels of the child welfare program area. Director Rawlings reassured legislators that these positions were not front-line staff, which will be kept at full employment levels. DFCS also eliminated six of 44 positions in foster care recruitment.  Rawlings also mentioned $4.9 million in savings associated with the implementation of in-house administration of the Gateway system. Director Rawlings accented savings of $6.7 million in out-of-home care; stressing that because 2,000 fewer children entered care due to the Division’s efforts, DFCS would not need the full $10 million it had requested last year.

Most of the questions from legislators centered around the elimination of vacant positions. Rep. Al Williams (D-Midway) asked why the Division has trouble filling vacant positions and expressed concern that the eliminated positions were important to the Division’s functions. Rawlings noted that low unemployment rates make hiring difficult and stressed that front-line positions would not see a reduction.

Rep. Dominic LaRiccia (R-Douglas) noted that he has heard of particularly high case loads for caseworkers in rural areas and asked what efforts can be made for recruitment and retention. Director Rawlings explained that he has made this a priority in the last year and has begun making changes including simplification of paperwork processes and continuous recruitment practices.

Board of Healthcare Workforce

Executive Director, LaSharn Hughes, jumped straight into the Board’s budget proposals which she characterized as touching all programs in order to balance cuts fairly.

Questions and comments from lawmakers including Chairman Terry England (R-Auburn) and Rep. Butch Parrish (R-Swainsboro) showed concerns with the cuts to physician recruitment and retention. Both Chairman England and Rep. Parrish noted that many of the cuts hit programs the General Assembly had worked hard to build in recent years. Ms. Hughes reiterated that all programs under the purview of the board were cut to avoid certain programs receiving disproportionate cuts.

Department of Community Health

Frank Berry, Commissioner of the Department of Community Health, began his presentation by thanking legislators, agency staff, and the Governor’s Office for their work. He then called upon the Department’s CFO, Lisa Walker, to walk lawmakers through important budget changes.

Originally budgeted $15,649,092,261 ($3,572,602,642 in State Funds) in FY 2020, the Amended FY 2020 proposal includes changes totaling $9,714,021 (cuts of $12,715,641 in State Funds) for DCH. The FY 2021 proposal calls for $16,097,815,832 ($3,799,360,737 in State Funds). The changes from the FY 2020 budget are more than $448 million more in total funds.

Lawmakers asked ample questions related to the funding of the Medicaid waivers, if approved. Many of these questions, including those from Sen. David Lucas (D-Macon) and Sen. Jen Jordan (D-Atlanta) reflected concerns about funding structures and administrative costs for work requirements.

Other questions included Rep. Darlene Taylor’s (R-Thomasville) inquiry into the reason for cuts to the Rural Health Innovation Center and Rep. Ron Stephens (R-Pooler) digging into the landing spot of funds allocated to the Medicaid Part D Clawback.

Department of Behavioral Health and Developmental Disabilities

Commissioner Judy Fitzgerald painted a picture of a Department faced with a tough budget scenario. She explained that because much of the agency’s budget was not exempt from the Governor’s directives, there were some unavoidable cuts to services.

Originally budgeted $1,408,568,597 ($1,230,810,591 in State Funds) in FY20, the Amended FY20 proposal includes cuts totaling $34,428,328 ($33,340,642 in State Funds) for DBHDD. The FY21 proposal budgets $1,383,176,033 ($1,206,505,713 in State Funds) in spending for DBHDD, a decrease of $25,392,564 ($24,304,878 in State Funds) from the original FY20 spending plan.

Lawmakers appeared upset at the depth of some proposed cuts. Rep. Katie Dempsey (R-Rome) asked for the Department’s help in helping reducing the total amount of reduced services and noted that she was specifically distressed by the prospect of increased instances of suicides and substance abuse disorder. Rep. Darlene Taylor declared the cuts unacceptable; that there were too many needs in rural communities and around the state.