Georgia’s economy has continued to weaken over the last months. An unprecedented drop in state revenues of $4.5 billion during the period has required the House to make even deeper budget cuts because of our slow economic recovery. We eventually found that simply cutting programs and services would not be enough to close Georgia’s budget shortfall. In order to fill the deficit, yet preserve our commitment to education and public safety, other measures had to be taken.

To help fill the budget gap and spur our economy, the House passed a revised version of House Bill 1055 this week. The original bill corrects inconsistencies in various fees that are charged by the state. Currently, some fees cover the cost of their respective service, while other fees fall short of covering the cost. Some state fees are regularly updated while others have not been adjusted in over 50 years. HB 1055 will correct these loopholes in current law and bring about 75 fees in Georgia up-to-date, resulting in approximately $96 million dollars for Georgia.

In addition, House Bill 1055 was amended to reflect a partnership between Georgia’s hospitals and state government. In an effort to close the state’s Medicaid shortfall, organizations that represent Georgia’s hospitals, including the Georgia Hospital Association, the Georgia Alliance of Community Health, and Hometown Health, have agreed to support a temporary threeyear provider fee on certain hospitals to provide funding for the most vulnerable among us. This voluntary, self-imposed payment agreement will allow the state to receive federal Medicaid dollars by a three-to-one ratio while also preventing a possible 10.25 percent Medicaid rate cut to physicians and hospitals. Our hospitals in District 157 are classified critical access facilities and would be exempt from the fee.

HB 1055 was also amended to include a tax-cutting measure to stimulate economic growth and provide relief to Georgians. The measure eliminates the state quarter mill property tax. This will get the state out of the property tax business and provide manageable and meaningful tax relief to Georgia property owners. The state quarter mill of property tax will be phased out over a five-year period beginning in 2012. For tax years beginning on or after Jan. 1, 2016, there will be no property tax quarter mill levied by the state, reducing taxes by an estimated $94 million per year after it is fully implemented.

The other tax cut in HB 1055 will implement a five-year phase out of the senior income tax starting in 2012. Once fully implemented, all retirement income for taxpayers age 65 and older will be excluded from state income tax. This tax cut will provide an incentive for retirees to relocate to Georgia and contribute to the local communities to which they move. Once all provisions are fully phased in, these four measures included in House Bill 1055 will save Georgia tax payers approximately $140 million.

As your representative, I would like to know your opinion on these bills and other issues that concern you and your family. You can reach me at my Capitol office at (404) 656-5116 or my email at jon.burns@house.ga.gov . Thank you for your time.