Busy Perdue gives 16 bills the legislative boot

House Speaker Glenn Richardson (R-Hiram) and House Rules Chairman Earl Ehrhart (R-Powder Springs) were among the lawmakers to have pet projects vetoed Monday by Gov. Sonny Perdue. 

Perdue, to top off a busy day of signing and vetoing, issued 16 vetoes, including the promise killing of H.B. 481, the jobs tax credit and capital gains tax cut bill. 

But also in those 16 were H.B. 100, which made major changes to the year-old tuition scholarship tax credit program that Ehrhart championed in 2008. The program allows taxpayers to get credits for giving to organizations that offer scholarships for private K-12 programs. 

Ehrhart’s changes would have streamlined some of the steps needed to apply for the credit. But Perdue said he objected to another change that would have allowed taxpayerse to receive both a tax credit and a deduction for contributions. Perdue said it would have actually reduced the amount of money available for scholarships. 

Richardson saw his BRIDGE bill make it to the finish line only to fail yet again. The Building Resourceful Individuals to  Develop Georgia’s Economy plan was added to S.B. 178 late in the session. The Senate measure dealt with extending the state capital outlay program to 2011 — something Perdue wanted. 

But the governor has long opposed Richardson’s plan to revamp the state’s vocational and job training in high school and not just because of the estimated $146 million annual cost. Richardson and Rep. Fran Millar (R-Dunwoody) have worked for years to get the plan into state law. 

Here are the messages Perdue issued today in vetoing the 16 bills. 

Veto Number 1

HB 56            House Bill 56 relates to the distribution of local option sales tax proceeds among counties and cities.  The bill changes the process whereby counties and cities must renegotiate a new distribution formula after a census.  Currently, if the county and qualified cities therein cannot agree on a new distribution formula, the tax is repealed.  The bill removes that automatic repeal and allows sales taxes to continue to be distributed under the old formula while cities and counties litigate over a new formula.  I believe that the most powerful incentive for local governments to agree is the potential loss of funds for lack of agreement.  Because this bill removes the current powerful incentive, I VETO HB 56.

Veto Number 2

HB 100          House Bill 100 provides changes to Georgia’s student scholarship organization tax credit program enacted in 2008.  Among other things, these revisions include allowing a taxpayer to receive both a tax credit and a tax deduction for contributions to a student scholarship organization.  Allowing a dollar-for-dollar tax credit as well as a tax deduction would actually reduce the amount of actual contributions available to student scholarship organizations each year, thereby reducing the funds available for scholarship recipients otherwise qualified for the scholarship.  I agree that changes are needed to the original student scholarship organization law and I supported HB 394, which would have enacted the changes I believe are necessary.  In reviewing legislation, I must consider fairness for all Georgians.  If some Georgia taxpayers could reduce their income tax liability by seventy-five percent, it could have a significantly detrimental impact on other citizens’ educational and other opportunities.  For the foregoing reasons, I VETO HB 100.

Veto Number 3

HB 481          Georgia is constitutionally required to maintain a balanced budget: for every dollar in decreased revenue, we must correspondingly cut expenditures.  We cannot deficit spend as the federal government does, even if those deficits generate economic growth in the long term.  Recognizing this constitutional obligation, my administration, working with the General Assembly, has cut taxes in each year I have been in office.  Together, we provided conservative, targeted and job-creating tax relief to Georgians.  This year I have continued this approach by signing certain bills that establish or continue tax cuts where possible. 

Consistent with the economic downturn experienced across our country, in Fiscal Year 2009 state general fund revenues are expected to be $2.7 billion less than the original revenue forecast for the Fiscal Year 2009 Budget.  Given this reduction of 13.3%, the State has drastically and appropriately reduced employment and the purchases of goods and services in order to live within our means.  Furthermore, in Fiscal Year 2010 state revenues are currently forecast to be $17.0 billion, an amount that is 16.8% below Fiscal Year 2008 state revenues, demonstrating negative revenue growth in three years.  During a period of growth in our economy, the budget may be able to absorb tax cuts that result in short term revenue reductions but provide long term economic benefits.  We are not, however, experiencing a growing economy at this point.  Accordingly, the current budget environment – where revenues are continuing to decline and not expected to recover in the near term – the short-term revenue reduction resulting from large tax cuts cannot be sustained in a manner consistent with the budgets passed by the General Assembly. 

The General Assembly enacted a budget that contemplates current falling revenue but does not incorporate the additional, significant estimated revenue reductions resulting from House Bill 481.  While some argue these tax reductions will ultimately generate more revenue, the constitutional restraint of a balanced budget prevents policymakers the luxury of time to allow that growth to overcome the short-term loss of revenue.  Should the General Assembly choose to enact a budget next session that incorporates the estimated revenue reductions caused by large tax cuts, I would entertain such cuts at that time.

House Bill 481 combines a number of tax and fee provisions.  These provisions include: a suspension of certain business activity filing fees with the Secretary of State; changes to the unemployment tax; a $2,400 per employee tax credit provided to companies hiring employees meeting certain conditions; a phase out of the estimated sales and use tax paid by certain retailers collecting sales and use tax; the elimination of the net worth tax paid by companies; and a reduction in the long term capital gains tax rate.  Estimates of the revenue impact to the State and the related additional cuts in services to residents as well as reductions in state purchases and employment aggregate in excess of $1.5 billion over the next three years, with over $145 million in reductions required in Fiscal Year 2010, which begins on July 1, 2009.  Given that (1) Georgia cannot deficit spend; and (2) the additional revenue reduction of over $145 million in Fiscal Year 2010 with even larger reductions projected in the years to follow, more drastic cuts would be necessary in needed services and other expenditures.  Such cuts are not supported by the current budget act and the policy decisions expressed therein.  In short, while this legislation may be supportable in different economic times, given our constitutional and fiscal constraints, I do not believe this legislation, although well meaning in intent, can be afforded at this time.  Therefore, I VETO HB 481.

Veto Number 4

HB 553         House Bill 553 establishes a Local Government Equipment Financing Authority and a County Government Equipment Financing Authority.  These authorities would enable a mix of local governments to come together through these authorities and incur debt to finance purchases of personal property.  I have concerns about increasing debt through the use of authorities when there remains an existing non authority based process for local governments to finance purchases, and, therefore, I VETO HB 553.

Veto Number 5

HB 662         The original version of HB 662 was legislation I supported to move the Capitol Police from the Georgia Building Authority to the Georgia State Patrol, thereby realizing efficiencies by administratively aligning law enforcement agencies.  HB 662 was amended during the legislative process to provide the exact opposite.  Because I believe the bill as introduced creates more value for Georgians, I VETO HB 662.

Veto Number 6

HB 710          House Bill 710 amends the South Georgia Regional Information Technology Authority’s board membership by adding representation from the Flint River Soil and Water Conservation District.  Since the introduction of this legislation, the Flint River and Soil and Water Council has subsequently elected to withdraw from participating in the Authority; consequently, I VETO HB 710.

Veto Number 7

HB 734 House Bill 734 changes the manner in which the City Commission of Waycross conducts public business. Currently, any person may address the City Commission so long as such person documents a desire to speak at least two business days before the Commission meeting. With HB 734, the General Assembly superseded the local ordinance requires the City Commission to hear any municipal citizen for five minutes if the citizen expresses interest in speaking sometime before the meeting. Because such regulations go to the heart of municipal self-government, they are usually created — and changed — by local ordinance. In addition, the City Commission was not consulted before this legislation was introduced, and input from local constituents was overwhelmingly against the proposal by a margin of two to one; consequently, I VETO HB 734.

Veto Number 8

HB 735 House Bill 735 changes the manner in which the Ware County Commission conducts public business. Currently, any person may address the County Commission so long as such person documents a desire to speak at least one business day before the Commission meeting. With HB 735, the General Assembly superseded the local ordinance requires the County Commission to hear any county citizen for five minutes if the citizen expresses interest in speaking sometime before the meeting. Because such regulations go to the heart of home rule, they are usually created — and changed — by local ordinance. In addition, the County Commission was not consulted before this legislation was introduced, and input from local constituents was overwhelmingly against the proposal by a margin of two to one; consequently, I VETO HB 734.

Veto Number 9

SB 123           Senate Bill 123 provides that pharmacy benefit managers must obtain a license from the Georgia Department of Insurance to do business in Georgia.  Pharmacy benefit managers have helped lower the cost of administering the State Health Benefit Plan and Medicaid program to Georgia taxpayers; they have also kept insurance premiums lower for Georgians with commercial health insurance.  The cost-reduction methods employed by the pharmacy benefits managers, however, have not gone without significant and troubling criticism.  I have spoken with the legislative sponsor of SB 123, and I will work toward an administrative solution to address the issues giving rise to this legislation.  Accordingly, I VETO SB 123.

Veto Number 10

SB 159           Senate Bill 159 creates a Hemophilia Advisory Board that will make recommendations about the treatment of hemophiliacs and others with blood disorders to the Director of the Division of Public Health and the Commissioner of Insurance.  The legislation requires the Advisory Board also to make recommendations on the standards of care for persons with hemophilia and other blood disorders.  I believe this could create unnecessary litigation and usurp the role of expert testimony properly qualified by the General Assembly’s adoption of the Daubert standard in O.C.G.A. § 24-9-67.1.  I have spoken with the bill’s legislative sponsor and, consequently, I will issue an Executive Order to establish an advisory board similar to the one contemplated by SB 159.  For these reasons, I VETO SB 159.

Veto Number 11

SB 178           Senate Bill 178, in its original form, extended the sunset on Georgia’s capital outlay program from June 30, 2010 to June 30, 2011.  Late in the legislative session, three unrelated education provisions were added in a conference committee report.  Those provisions included (1) language from HB 278, which granted local school systems temporary waivers from various expenditure controls; (2) HB 400, also known as the BRIDGE bill, which substantially reconfigures our K-12 education system; and (3) language not previously introduced as legislation which would require the State to provide additional funding for dual enrollment programs in career academies and charter schools.  I strongly support the extension of the capital outlay program and the temporary waiver of expenditure controls, but have serious concerns about the remainder of SB 178.

I have long supported funding dual enrollment in a manner that covers the costs of the program at both the high school and higher education levels without using taxpayer funds to pay twice for the same student enrolled in the same class.  I am working closely with policymakers and persons interested in this issue, the ongoing process has been data-driven, and I am confident that the solution we will reach will be the right one for all parties involved.  The solution offered in SB 178, however, imposes a funding requirement that is arbitrary and singles out charter schools and career academies for special treatment while ignoring dual enrollment programs in all other public high schools. 

When Members of the General Assembly introduced the BRIDGE legislation last year, a fiscal note by the Department of Audits in conjunction with the Department of Education estimated the cost at $1.2 billion.  The General Assembly did not request a fiscal note this year, but the Governor’s Office of Planning and Budget estimated that the current bill will impose an immediate one-time cost of $417 million and an ongoing annual cost of $146 million.  Notwithstanding my substantive policy concerns about this bill, the State simply cannot afford it at this time.  For these reasons, I VETO SB 178.

Veto Number 12

SB 211           Senate Bill 211 creates a set-aside for the purchase of routine office supplies outside of the established state procurement process.  Office supplies currently represent approximately $40 million in annual state spending.  The goal of state purchasing should be to obtain the best value for Georgia taxpayers’ funds: purchasing necessary items of adequate quality at the lowest possible price.  I am sympathetic to the concerns of small businesses and do not wish to prevent these business from participating in the procurement process, but I am confident that small businesses do not need special legislative set asides to be able to compete to provide the best value for Georgia’s taxpayers.  Therefore, I VETO SB 211.

Veto Numbers 13, 14, and 15

SB 261, SB 266, SB 267               Senate Bills 261, 266 and 267 freeze the ad valorem tax rates in the Camden County municipalities of St. Mary’s, Kingsland and Woodbine.  On May 5, 2009, I signed into law House Bill 233, which imposes a moratorium on all increases in the assessed value of all classes of all subjects of property.  Consequently, in order to foster uniformity within the municipal ad valorem tax structure, I VETO Senate Bills 261, 266 and 267.

Veto Number 16

SR 431          Senate Resolution resolves that the Georgia Civil War Heritage Trails, Inc. “has the sole authority to plan, construct, and maintain Civil War era historic driving trails upon any roadway in the State of Georgia.”  While the efforts of this organization toward the designation of such historic trails are noteworthy, I disagree that this private entity should have the sole authority to plan, construct, and maintain Civil War era historic driving trails upon roadways in the State of Georgia and therefore VETO SR 431.

3 comments Add your comment

[...] Of 16 vetoes just announced by Sonny Perdue, the governor decided that his rejection of H.B. 481 required the most detailed explanation. [...]

[...] A busy Perdue gives 16 bills the veto boot. [...]

Sandy

May 15th, 2009
3:55 pm

Sonny makes a whole day out of vetoes,that is all he has to do? Why is his budget not cut.