2013 General Assembly
Sen. Crane disappointed with legislative session outcome
by Sarah Fay Campbell
In the 2013 Georgia General Assembly session, “we did several things that I think are going to be detrimental to Georgia, and very little that will be good for us,” said State Sen. Mike Crane, R-Newnan.
Many of the more contentious bills, including some to expand the areas where guns can be legally carried, didn’t make it this year, but because this was the first year of the two-year session, the sponsors of those bills can pick up where they left off next year.
“A lot of the bigger issues roll over to the second year,” Crane said. “The very pressing issues that have to do with the budget, they just deal with those as they come up because they have to.”
One bill introduced at the very end of the session would replace the state’s income tax with a “Fair Tax” style sales tax, so there may be “some burgeoning talk of some real, continual tax reform. That probably is going to show up next year,” Crane said.
Toward the end of the session, Crane sponsored an amendment to a bill regarding health insurance coverage for employees of the Georgia World Congress Center Authority. That amendment would prohibit the State Health Benefit Plan for state employees from covering abortions, except those needed to preserve the life or health of the mother.
After the amendment was approved by the Senate, Gov. Nathan Deal indicated his support for it.
The legislation never moved again in the House.
After the bill failed to pass, there was some talk the governor might go ahead and make those changes administratively.
That makes sense, according to Crane. “Because of the way the State Health Benefit Plan is run, the companies that operate the plan are directed by the state on what to offer in the plan.”
All those details, such as deductibles and what is and is not covered, are already determined administratively, not by state law.
“This is just one more coverage that they can specify through their plan,” he said. Crane said Thursday that he hadn’t talked to Deal’s office about the issue yet, but planned to do so “in the next week or so.”
If the governor takes that action, it will be continuing a trend.
“A lot of times we’ll see… government by administration,” Crane said. “That’s good and that’s bad,” depending on the specifics.
At the federal level, “we have seen how that has gotten out of control,” Crane said, mentioning the Environmental Protection Division, and Georgia Power’s decision to close several of its oldest coal-fired power plant units “just because of EPA regulations that continue to press down. That is the government by administration that I am talking about.”
For some purposes, government by administration makes sense, but in others, it can be problematic.
“Because there is not much of a citizen voice at that level,” Crane said. “If you have ever tried to call the IRS or any administrative branch of government, it is very hard to get any kind of response. You typically do much better dealing with your legislators at either the federal or state level.”
More government by administration appears to be a trend at the federal level and “we’ll probably see more of it at the state level.”
The biggest example in Georgia was one the earliest bills to pass the legislature in 2013. It dealt with the hospital provider fee, also known as the “bed tax,” which was set to expire this year.
Instead of voting on whether or not to renew the tax, Deal asked the House and Senate to pass a bill that would put the power to set and collect the tax in the hands of the Georgia Department of Community Health. DCH already administers a similar tax on nursing homes.
There is some variability written into the new law “so the rate of the tax can change administratively, too, without legislative oversight,” Crane said. “We can always go back and try to pull it back, but you know how hard it is to undo things. Getting things done may be difficult, but getting them undone is next to impossible.”
Crane thinks the bed tax should have remained a legislative responsibility. When the new tax was first created a few years ago, the vote and debate were very contentious. The tax/fee is used to “pull down” more federal money for Medicaid, and helped fill a serious hole in the Medicaid budget.
“It was introduced as a temporary measure because of funding shortfalls in the state budget, and that was a very real reality,” Crane said. “But what was temporary is now going to be, I believe, permanent, unless we can be successful in peeling it back.”
Crane doesn’t expect any changes to the legislation in the next year or two, “but once the economy starts to recover I will certainly lead the charge to try to repeal that embedded tax.”
“I don’t like when we tell somebody it is going to be temporary and then we sneak around and make it permanent,” Crane said. “I don’t think that is the way we should follow up on promises.”
The “fixes” to the state’s new Title Ad Valorem Tax law, which replaces the annual vehicle tag tax with a one-time tax on the fair market value of a vehicle, was another case of delegating authority to the administrative branch.
The Georgia Department of Revenue now has the authority to change the tax rate charged for vehicles purchased through “buy here, pay here” lots, Crane said.
Some changes needed to be made regarding the buy here, pay here lots, Crane said. But he added, “I think that is another bad way to do something that is really fundamentally the legislature’s role.”
He said the tax rate needed to be looked at because those businesses are more a “rent to own” model than a regular car dealership. The way the new law works is “you pay sales tax on your rental payment and then if you get to an ownership, they work out a fee structure,” Crane said. He has heard, though he has not been able to verify it, that vehicles at buy here, pay here lots end up being bought — and then repossessed or returned — five times on average.
“I did not like how we fixed that bill. There is more work to be done on it.”
Crane said that between now and the next session, he wants to get together and talk to local traditional car dealerships. He wants to give them a few months to get familiar with the new system. Then, the dealerships will “have an opportunity to come and get together as a group and talk about the difficulties with the new law.”
He’s also concerned about the large tax burden on people buying cars from individuals.
Under the old law, people who bought vehicles from dealers had to pay sales tax, but those buying from individuals did not. The new law eliminates the sales tax and charges everybody the TAVT.
The 6.5 percent TAVT has to be paid before the vehicle can be titled.
When someone buys from an individual, they will have to pay the TAVT on the entire value of the vehicle. “But if I did that same transaction at a dealer, I would be able to trade in my old car,” Crane said. And the value of a trade-in is subtracted from the value of the purchased vehicle for the purposes of the tax. “If I traded a $9,000 vehicle and bought a $10,000 vehicle, I would only have to pay tax on $1,000,” Crane said. “I think that is unequal treatment under the law.”
One possible fix Crane is thinking of is allowing some kind of credit toward the tax if someone sells a vehicle within a year of buying a different vehicle.
Though Crane isn’t too happy about the results of this year’s session, “I’m optimistic about next year,” he said.
In the Senate, there was a “whole new slate of leadership.” This year’s session gave them “a little time to get their feet on the ground and set a whole new tone,” he said. “In talking with them, I’m optimistic next year is going to see them have a more pointed agenda for what we are trying to accomplish for Georgia.”
In next year’s session, he expects to see the Senate “being more productive for the citizens as we try to reduce government expansion and waste at the state level.”