Special Edition Gold Dome Report - January 20, 2017
Greetings from the Gold Dome! Today is an historic day with our nation's 45th President, Donald Trump, being sworn into office. We now wait to see what is in store for the first 100 days of his presidency. Georgia is uniquely positioned as two of our own have been tapped for Cabinet positions – Congressman Tom Price (R-Roswell) has been selected to become the head of the Department of Health and Human Services and former Governor Sonny Perdue (R-Bonaire) has been chosen as the leader for the Department of Agriculture. Both of these individuals await confirmations for their posts. Our Report, though, focuses on actions and activities of our State's General Assembly over the last week.
Lawmakers from the House and Senate Appropriations Committees met on Tuesday and Wednesday to delve further into the details of the FY 2017 Amended and FY 2018 Budgets as proposed by Governor Deal. This Report outlines some of those discussions. Also in this Report, we have provided some additional information on legislation and news from the Governor's Office.
Child welfare provider organizations, which are members of Together Georgia, celebrated their "Day at the Capitol" on January 18. Providers were on hand to educate lawmakers on their work with children and adolescents who they serve.
Governor's Office News
Governor Deal made several announcements this week. Some of those include:
- The unveiling of "High Aspirations" made with the Governor's Office of Student Achievement. This is the second installment of the "Real Teachers Real Voices" campaign which began with Rep. Amy Carter (R-Valdosta). In this most recent installment, it highlighted a Douglas County Teacher at New Manchester High School, Casey Bethel. Mr. Bethel is also Georgia's 2017 Teacher of the Year.
- The announcing of the winners for 2016-2017 of the Innovation in Teaching Competition. These awards are to recognize and reward teachers who implement new and creative instructional strategies to help advance student achievement. The awardees also receive a monetary stipend and their schools receive a grant to help support their strategies. This Innovation Fund began in 2011 with a $19.4 million grant competition – since it began, more than $31 million has been invested through 78 grants to 50 school districts, charter schools, postsecondary institutions and nonprofit entities. This year's winners are:
- Claudia Fitzwater (1st-5th grades, Spanish) – Charles R. Drew Charter School (Atlanta Public Schools)
- Cheri Nations (8th grade, Physical Science) – North Gwinnett Middle School (Gwinnett County Public Schools)
- Kaycie Rogers (3rd grade, Science and Social Studies) – East Jackson Elementary School (Jackson County School System)
- The creating of new Georgia jobs by Colorado Premium. This entity, a manufacturer of premium protein products, will be creating 190 jobs in Carroll County, investing $15 million with its food processing plant by the end of 2018.
- The changing of leadership within the Department of Driver Services and Department of Economic Development. Spencer R. Moore has been tapped to become the new Commissioner for the Department of Driver Services. Moore has been serving as a Deputy Commissioner since December 2012. He is replacing Bert Brantley as Brantley will move to the Department of Economic Development where he will become its Chief Operating Officer and the executive director of Georgia Allies.
SB 19, by Sen. Josh McKoon (R-Columbus), proposes creation of the "Expenditure Data Base of the State of Georgia" in O.C.G.A. § 50-5A-12. It specifically requires that the Office of the State Treasurer establish and maintain this data base collecting all expenditures of State government made during each fiscal year that commences on or after July 1, 2017. Within six months of the close of each fiscal year, the data base is to be made available on the State Treasurer's website and accessible to the public for five years from its publication. There are definitions for "state entity" (which includes counties, municipalities, local authorities, local school districts, institutions of higher education, and retirement systems). It does define "vendor" as well. It requires by the tenth day of each month the State entity to provide information to the State Treasurer on expenditures paid to a vendor for the preceding month and within 180 days of the initial publication of the data base, it requires each State entity to display and maintain an internet link to the data base on its website. Additionally, the State Treasurer is to report annually (beginning on February 1, 2019 and thereafter) on website statistics on the usage of the data base.
SB 22, by Sen. Josh McKoon (R-Columbus), addresses Georgia's Ethics Laws and in particular campaign contributions in O.C.G.A. §21-5-31. It seeks to:
- Provide that any business which contracts with Georgia or local agencies, in the aggregate, annually for a total of more than $50,000.00 and any affiliated entities or affiliated persons of such business entity, be prohibited from making any contributions to any candidate or his or campaign committee for the office responsible for rewarding contracts or any declared candidate or his or her campaign committee for such office
- Provide that any business entity whose aggregate pending bids and offers on State or local contracts of more than $50,000.00 or whose aggregate pending bids and offers on State or local contracts combined with the business entity's aggregate annual total value of State contracts exceed $50,000.00 and any affiliated entities or affiliated persons of such business entity, be prohibited from making any contributions to any candidate or his or her campaign committee for the office responsible for awarding a contract on which the business entity has submitted a bid or offer during the period beginning on the date of the invitation for bids, request for proposals, or any other procurement opportunity is issued and ending on the day after the date such contract is awarded or any declared candidate or his or her campaign committee for such office.
It defines an "affiliated entity" and who is an "affiliated person." Violations can lead to voidance of a contract; three more violations within a 36 month period would void contracts and also be prohibited from contracting (or bid or respond to any invitation to bid or request for proposals) for a period of three years from the date of the last violation.
SB 23, by Sen. Josh McKoon (R-Columbus), seeks to add a new Code Section at O.C.G.A. § 28-1-18 so that "no member of the General Assembly who serves on a conference committee shall be eligible for employment in State government, other than as an elected official, for a period of 24 months immediately following such member's service on such conference committee."
SB 24, by Sen. Josh McKoon (R-Columbus), proposes to amend O.C.G.A. § 20-1A-14(b) relating to early care and learning. It would allow nursery schools, playschools, kindergarten programs or other educational programs for children who are ages zero through six and which operate for no more than four consecutive hours per day and up to five days per week to be exempt from licensure.
SB 25, by Sen. Josh McKoon (R-Columbus), seeks to create the Georgia Health Care Transparency Initiative in O.C.G.A. § 33-1-25. The purpose of this data base is to receive and store data from a submitting entity relating to medical, dental, and pharmaceutical and other insurance claims information; unique identifiers; geographic and demographic information for covered individuals as permitted; and provider files. It will be overseen by the Commissioner of Insurance and advised by the Georgia Health Care Transparency Initiative Board (which will include representatives from the Departments of Human Services and public Health as well as nine appointees by the Governor – including health insurance representatives). Submitting entities would begin submitting information on a quarterly basis by January 1, 2018 and thereafter.
SB 26, by Sen. Josh McKoon (R-Columbus), imposes requirements on contracts and purchases by local boards of education in O.C.G.A. § 20-2-501 where it would require that a local board of education is to award all professional services contracts exceeding $50,000.00 over a 12-month period by competitive sealed bidding. Also, in O.C.G.A. § 36-91-103, it defines the term, "construction manager at risk," and requires that if a local board of education selects such construction manager at risk through a competitive procurement that local board is to require that the guaranteed maximum price provided by such construction manager at risk not be subject to change after the contract once it has been executed.
Joint Appropriations Hearings
We covered all of the hearings this week. Below are some highlights of a few of the larger areas of the State's Budget and what took place in those particular hearings.
On Tuesday, January 17, the Governor highlighted his Budget proposals to the members of the Joint Appropriations Committee, following some initial remarks on economic growth in 2016 by State economist, Kenneth Heaghney. Heaghney described the growth in the economy as solid, growing at approximately 2.3 to 2.4 percent in 2016. This rate exceeds the national economic growth of 1.7 percent in 2016. Georgia added 99,000 jobs for the year, and the urban areas, of course, grew faster than the rural ones, but only northwest Georgia, including the Dalton carpet mecca, lost jobs.
The Governor used his comments to accent certain elements of his proposed budget and repeated his phrase from two addresses last week of "accentuate the positive." He emphasized the proportion of revenue growth of approximately $3.0 billion that is available for new spending is 17 percent, because growth in school and Medicaid enrollments and some other mandated programs consume the remainder of the new funds. Much of the increase is also from the changes to the motor fuel tax and is dedicated to road improvements and enhancements. The Governor explained and strongly endorsed the rebuilding of the rainy day fund which has now reached over $2.0 billion, a dramatic increase in the Governor's term, apparently in an urgent message to resist the urge to spend the fund or attempt to persuade him to adjust the revenue target for the budgeted programs and new proposals. .
Governor Deal accented his new funds in the Department of Education earmarked this coming year for increases in teacher salaries. Some of the reduction in the austerity cuts, for the last three years, have been used by school superintendents to reduce furlough days and increase days of instruction, so that not all of the $1.0 billion had resulted in salary increases. The new budget proposes an across-the-board 2 percent increase. He is also proposing enhanced salaries for law enforcement and State case workers in the foster care system, above the base level State employee salary increased. These additions to salaries for certain employees seek to deal with high turnover rates in those positions. Further, he is proposing an increase in the payments to State recruited foster parents of 57 percent to total $3.9 million. This rate increase is in addition to the additional dollars for projected growth in the number of foster care children in out-of-home placement.
Continuing his focus on Georgia's nationally recognized criminal justice reform, the Governor accented that he is increasing dollars for the accountability courts of $4.2 million, for pre-release vocational training in the prisons of $3.7 million, and for the Metro Atlanta pre-release prison of $6.6 million. He also highlighted the potential economic growth resulting from the NASA installation near Augusta of a new cyber defense facility. Georgia will supplement this effort with its own training program for students and potential employees in the cyber security arena.
The State economist was mildly optimistic that the projected revenue estimate for FY 2018 of approximately $25 billion can be achieved. State revenue growth has recently been in the 4 percent range and the budget for FY 2017 and FY 2018 is premised on 3.6 percent growth. He accented that sales tax revenue is increasing steadily, as well as income tax revenue from increased employment. He was asked by Senator Hill if an expected increase in income tax refunds would undercut the predicted total revenue growth, and he responded that he thought the projection was sound and that some of the income tax refunds had already occurred in the first part of FY 2017 last fall.
Department of Education
Superintendent Woods and Chief Financial Officer for the Department Ted Beck highlighted some of the Department of Education's (DOE) successes as well as its budgetary needs for the FY 2017 Amended and FY 2018 years. Among successes, Superintendent Woods noted that DOE has reduced the amount of testing with the passage of SB 364; graduation rates have improved; and students' ACT and SAT scores are higher than the national averages. Woods addressed some of the issues around Georgia's failing schools, discussing DOE's various targets which it is hitting: performance contracts (strategic waiver and charter system); CCRPI (the A-F grading scale; 100 point scale); priority or focus schools (federal criteria and designations); and SIG schools (again federal criteria and designations). He discussed the accountability consequences when contract requirements are not met for one and subsequent years (e.g., change of leadership and personnel by the local board of education to conversion of a charter school). Woods also noted that there are entities which can help provide support to schools (these include RESAs, School Effective Specialists and District Effectiveness Specialists). He indicated that what would turn around the chronically underperforming schools in the State would include the new "solutions-based model to turning around schools" and alignment and accuracy of accountability models. This solutions model would include a tiered system of supports for schools. The solutions model will increase flexibility by aligning State and federal requirements and use of best practices. Woods also talked a bit about funding drivers involved, noting that full time equivalents in FY 2016 were 1,744,724 (compared in 2000 to 1,376,282). He also provided some data on numbers of births and Georgia birth rate; in particular, the numbers of births peaked in 2007 (more than 150,000) but have since dropped. Although in 2013-2014, births started to rise again (around 114,000).
Superintendent Woods explained that for FY 2017 Amended, DOE's proposal reflects an addition of $111.7 million in State funds for a total of State funds in the amount of $1.9 billion (and with federal funds a budget of more than $10.97 billion). The bulk of the additional funds is in the Quality Basic Education Program, requesting more than $111.19 million of which more than $85 million is the midterm adjustment. There are also these requests within that program as well:
- $9.1 million for an increase to the State Commission Charter School Supplement
- $9.4 million for the midterm adjustment to charter system grants
- $6.3 million for the midterm adjustment for the Special Needs Scholarship
- $581,722 for training and experience for Sumter Count ($302,450) and Hillside Conant School ($292,272)
Also in the FY 2017 Amended, the Governor has proposed a change within the Non-Quality Basic Education Formula Grants program to "utilize $71,110 in existing funds for the new Wellspring Living residential treatment facility."
In the FY 2018 Budget, State funds of more than $9.4 billion are proposed (an increase of $515.7 million over the FY 2017 Budget). There is an addition proposed of $85.8 million in the Quality Basic Education Equalization program (providing financial assistance to local school systems ranking below the statewide average of per pupil tax wealth). Other larger changes are included in the State's Quality Basic Education Program totaling more than $496.3 million:
- $160.1 million for the 2 percent increase to the State base salary schedule effective September 1, 2017
- $177.9 million for adjustments to the employer share of the Teachers Retirement System from 14.27 to 16.81 percent
- $133.2 million for enrollment growth and training and experience
- $366,762 (reduction) for differentiated pay for newly certified math and science teachers
- $178,289 more for school nurses
- $11.3 million for State Commission Charter School Supplement
- $4.4 million for Special Needs Scholarship
- $9.3 million for added funding for the charter system grants
In the Non-Quality Basic Education Formula Grants program (the appropriation which funds special initiatives such as children in residential education facilities and sparsity grants), there is an overall reduction of $107,977 to the program. While there are added increases for the 2 percent salary increase; adjustment to the Teachers Retirement System for the employer share; and an increase for sparsity grants, there is a reduction in funds for the residential treatment facilities "based on attendance" of $560,639.
There were a few questions raised by legislators. Sen. Freddie Powell Sims (D-Dawson) inquired about the "flexibility" and its impact on governance of schools. She also inquired about the audit process – especially how that worked with smaller school systems. Mr. Beck acknowledged that smaller systems had challenges; much appear to be driven by staffing and the lack of subject matter expertise. Superintendent Woods indicated that school improvement is a Department-wide effort and his staff members are moving outside of their silos. Rep. Carolyn Hugley (D-Columbus) asked about the alignment of accountability targets. Her concern is around student absenteeism. Superintend Woods responded that the Department is looking at absenteeism – they are also increasing school nurses as well as looking at social workers in the schools. The federal requirements are also looking at attendance. Sen. John Wilkinson (R-Toccoa) asked about funding for CTAE and, in particular, equipment. DOE explained that the Department had asked the Governor for $10 million but that was not included in the Governor's Budget for FY 2018.
Office of Student Finance
This entity oversees Georgia's HOPE grants and scholarships.
For FY 2017 Amended, the Governor has proposed an increase of $18.5 million, bringing the total State funding to more than $825.6 million. The bigger ticket change is the Move on When Ready program which is proposed to receive $16.7 million to meet projected needs.
In FY 2018, there is a proposed Budget of $892.1 million which is an increase of $83.5 million over FY 2017. Some of these changes are more than $49.3 million for HOPE Scholarships – Public Schools; $515.441 for HOPE Scholarships – Private Schools program; and more than $29.4 million for the Move on When Ready program (to meet need projections). HOPE scholarships are being increased in the proposal by three percent. The Tuition Equalization Grants program is also proposed to be increased by $3.6 million, increasing the award from $900 to $1,000 annually.
There were some questions raised. Rep. Regina Quick (R-Athens) asked about the $87.7 million in funding for FY 2018 (for Move on When Ready) and the actual funding formula used. She also asked if the agency was a mere pass through for funding. The response was that funding follows the students as it relates to Move on When Ready; the Quality Basic Education funds are separate and apart from the Move on When Ready funds. Another question asked was whether the Office was actually overseeing Move on When Ready or if that was done by some other entity. The Office indicated that SB 132 (passed in 2016) established compliance requirements and the Department of Education also has requirements – the Committees were assured that there are enrollment data and application data being tracked.
Department of Corrections
Commissioner Dozier spoke about this Department's Budgets. For FY 2017 Amended, the total State funds proposed is $1.16 billion, an increase of $39.7 million over the current Budget. The bulk of the request is $36.5 million for the Health program and there is another $2.8 million proposed for officer retention and transportation needs (87 vehicle replacements and four inmate bus replacements). In the Health program, these items are proposed:
- $17 million for an electronic health records contract (so as to maintain eligibility for the federal 340B drug pricing program)
- $10 million for Hepatitis C treatments
- $5.9 million for rising costs of generic bulk medications
- $2.1 million to address rising HIV medication costs
- $485,688 to fund rising psychotropic medications
- $861,408 to fund rising costs of chemotherapy medications
In FY 2018, State funds proposed are more than $1.2 billion with an addition of $77.6 million more than the FY 2017 Budget. In addition to officer pay adjustments and an increase of $19.2 million for the State Prisons program, the Health program is the large ticket item with a proposed increase of $55.4 million – again, the Department has more costs associated with the same areas as noted above which carry forward. They also have $764,928 for additional dental hygienists to see prisoners – virtually increasing staff by 80 percent. They also have added funds to address the Department of Juvenile Justice's portion of the administrative costs for the physical health contract with Augusta University ($1 million more); transfers of funds from the Department of Juvenile Justice RYDC program for healthcare costs ($12.1 million) and YDC program for healthcare costs (more than $8 million).
Sen. Nan Orrock (D-Atlanta) inquired about whether some of the healthcare costs may have been addressed if the State had opted to expand Medicaid – using federal versus State funds. She also asked what was being done to address physicians who had been utilized by the Department yet were found to not be providing the best care to prisoners. Commissioner Dozier explained that much of that should have been corrected with the new partnership with Augusta University and they now fully review doctors and staff. Sen. Vincent Fort (D-Atlanta) asked what was being done by the Department to address gangs within the prison system. Commissioner Dozier noted that much of the issue around gangs was resulting from the Department's ongoing effort to fight contraband – many renovations have taken place within the prisons to address safety, etc. Rep. Mary Margaret Oliver (D-Decatur) inquired about the Metro Atlanta prison and the $10 million cost associated and now its closure. Sen. John Albers (R-Roswell) inquired about prison population numbers. Commissioner Dozier indicated that there had been some fluctuations over the last three years. Rep. Andy Welch (R-McDonough) inquired about what the actual costs to be saved were with the partnership with Augusta University and the sharing of the costs with the Department of Juvenile Justice; Commissioner Dozier indicated it was early to say – but there would be buying power by combining. Sen. Freddie Powell Sims (D-Dawson) asked about facilities within the system which are not being used and what the State's plans were for those building – at the moment, there is nothing in the plan for those and there are costs associated as the Department maintains utilities at those but there are no current expansion plans.
Department of Behavioral Health and Developmental Disabilities
Commissioner Judy Fitzgerald spoke to the Department (or DBHDD) Budgets for FY 2017 Amended and FY 2018. Commissioner Fitzgerald spoke to the increasing of accountability in the provider networks for both the behavioral health side as well as the developmental disabilities portion of the Department's work. On the behavioral health side, the Department has worked on a redesign of the provider network with three tiers (including service definitions and standards); development of key performance indicators (such as access to services, crisis management, substance use treatment and support, etc.); transformation of financial infrastructure (fee for service and cost-based reimbursement); and ASO collaborative (allowing DBHDD to use managed care strategies within this public system and measure and improve access, quality and efficiency). On the developmental disabilities side of this increased accountability, DBHDD has overhauled the support coordination and intensive support coordination; transformed the transition process of individuals from hospitals to community; created the Office of Health and Wellness (providing clinical oversight by a registered nurse and her team); and looked at budgeting changes resulting from the Residential Cost Study. DBHDD still maintains five hospitals although two have closed; she indicated that the State would retain hospitals because of the needs to be addressed.
In the FY 2017 Amended, DBHDD is proposed to receive more than $1 billion in State funds, with an increase of slightly more than $12 million over the current budgeted amount. The two areas with the greatest changes are within the Adult Developmental Disabilities Services program where a proposed increase of more than $6 million is added for 250 additional slots for New Options Waiver (NOW) and Comprehensive Supports Waiver Program (COMP) for the developmentally disabled to meet the requirements of the DOJ Settlement. Another $6 million plus is added in the Adult Mental Health Services program to increase funds for mental health consumers in community settings to comply with the requirements of the DOJ Settlement Agreement. Commissioner Fitzgerald noted that only $2.6 million is expended on transportation needs. She further noted that DBHDD expects continued growth in the forensic population – again the need for hospitals.
Looking at the ADA Settlement, she noted that DBHDD had achieved compliance with the majority of elements which had cost the State (from FY 2012 to FY 2016) approximately $171.5 million. DBHDD has met almost all targets. There were some highlighted elements of the extension of the ADA Settlement: transitioning of folks with developmental disabilities from hospitals; waivers for individuals with developmental disabilities; community oversight of individuals with developmental disabilities; and mental health supported housing.
Looking at budget priorities, she highlighted that access to high quality care was a priority along with crisis services and the NOW and COMP waivers; forensic services; and funds for mental health housing services. DBHDD has asked for a 40-bed forensic unit at Georgia Regional for a cost of $4.3 million (in the FY 2018 Budget)
For the FY 2018 Budget, Governor Deal has proposed more than $1.09 billion in State funds – included in that is an addition of $64.6 million over the FY 2017 Budget. Again, the bulk of the changes are in the Adult Developmental Disabilities Services and Adult Mental Health Services programs. $12.1 million is proposed to annualize the cost of 250 NOW and COMP waiver slots (to meet the DOJ Settlement); $11.7 million for annualizing the cost of a provider rate increase for COMP; an increase of State funds of $8.4 million to reflect the loss of the Balancing Incentive Payment Program (BIPP) funds; $6 million for 250 additional NOW and COMP waiver slots; $1 million to annualize 100 NOW waiver slots; and a $3.1 million reduction due to Georgia's FMAP change (moving from 67.89 to 68.50 percent). In the Adult Mental Health Services program, it includes in part $7.7 million for funds for consumers in community settings to comply with the DOJ Settlement; $6 million for funding one Behavioral Health Crisis Center; and $2.27 million for the inclusion of State funds due to loss of BIPP dollars. There are eight behavioral health crisis centers now and a ninth is underway.
Commissioner Fitzgerald told the Committees that there were 469 total buildings within the DBHDD system.
Among challenges faced by this Department include:
- Having a sufficient clinical workforce (such as clinical social workers, counselors, etc.)
- Core behavioral health funding (because of a 9.5 percent population increase and Core outpatient services' funds which have not kept pace)
- Sufficient numbers of behavioral health crisis centers and crisis stabilization units statewide
- The Department also needs to prioritize the individuals on the developmental disabilities waiting list
- Maintaining a provider rate structure and getting good, quality providers is also an issue
Commissioner Fitzgerald also mentioned needs for addictive diseases, forensic services and housing. Per Commissioner Fitzgerald, DBHDD is working with sister agencies to meet needs.
Sen. Jesse Stone (R-Waynesboro) inquired about the current level of developmental disabilities waiting list. The Commissioner indicated that was a difficult question but there are more than 8,000 individuals. She stressed that was the reason to prioritize individuals.
Rep. Pat Gardner (D-Atlanta) asked about the behavioral crisis center. She reminded the Commissioner that there was no CSB in Fulton County and that Grady Hospital was overcrowded with more patients than it can afford. Commissioner Fitzgerald expressed that she had hoped for two behavioral health crisis centers – they need to prioritize Fulton and Savannah and look at need and timing. Further, Commissioner Fitzgerald told the Committees that DBHDD valued its partnership with Grady. Rep. Gardner asked if the inpatient beds at Grady were more expensive than crisis stabilization beds; Commissioner Fitzgerald responded yes and she would like to see more behavioral health crisis centers.
Department of Community Health
Commissioner Frank Berry, newly named in this role with DCH, provided an overview. He explained that the Department now has 1,993,279 in Medicaid and another 633,852 Georgians in the State Health Benefit Plan (FY 2016). Further, DCH is regulating more than 20,000 healthcare facilities in the State. The Aged, Blind and Disabled program has 500,334 or 19 percent of the Medicaid program; Low-Income Medicaid has 1,385,257 or 52 percent of Medicaid; and PeachCare for Kids has 127,688 or 4.9 percent. State Health Benefit Plan makes up the remainder with 24.1 percent of all beneficiaries (FY 2016). 52 percent of Georgia children (ages zero to 19) are getting health insurance through a DCH program (total child population is more than 2.7 million).
For FY 2017 Amended, State funds are small. The Medicaid items are using Tenet Settlement Agreements (a total of $110 million is used for one-time funding) for:
- $3.7 million to reflect projected increase in Medicare Part D Clawback
- $11.5 million to provide the matching funds for Disproportionate Share Hospital payments for private deemed and non-deemed hospitals
- $3.1 million for the hold harmless provision in Medicare Part B premiums.
In the State Health Benefit Plan, it includes language to:
- Increase funds to reflect membership, medical service utilization and medical trend changes since prior projection (total funds of $126 million)
- Reflect 2.5 percent average increase in employee premiums for non-Medicare Advantage plans effective January 1, 2017 (total funds of $7.2 million)
- Reflect $20 monthly premium increase for Medicare Advantage premium plan members effective January 1, 2017 (total funds of $5.28 million) (it was noted that retirees were informed about the monthly increase well in advance)
- Increase funds to raise the five-year benefit limit for children's hearing aids from $3,000 to $6,000 (total funds of $4,736)
- Reduce funds to reflect savings attributable to Medicare Advantage rates in plan year 2017 ($8.8 million)
- Reduce funds to reflect projected dependent verification audit savings ($17.6 million)
- Recognize plan savings attributable to pharmacy benefit management strategies such as enhanced compound pharmacy management ($39.1 million).
For FY 2018, there was a reduction of more than $76.4 million to Medicaid State funds. There were additions, though, of $4 million for State funds for the BIPP funds (waiver rates and slots) and $1.37 million to help reduce the numbers on the Community Care Services Program (CCSP) waiting list – in 2016, there were 2,010. Now, there are 954 on this list.
Again, in FY 2018, there were several items utilizing the Tenet Settlement Agreement funds:
- $38.4 million for growth in Medicaid based on projected need
- $11 million for the Medicare Part D Clawback payment
- $1.6 million for compliance with Hepatitis C treatment access requirements
- $17.9 million for increasing reimbursement rates to selected primary care and OB/GYN codes for 100 percent of the 2014 Medicare levels
- $2.5 million for behavioral health services for children ages zero to four
- $20.7 million for behavioral health services for children under 21 who are diagnosed as autistic
- Language to evaluate options to ensure mental health coverage parity for Medicaid and Children's Health Insurance Program beneficiaries with that of the commercial market
Again, there are changes for the State Health Benefit Plan:
- Increase funds to reflect membership, medical service utilization and medical trend changes since prior projection (total funds of $200.3 million)
- Reflect 2.5 percent average increase in employee premiums for non-Medicare Advantage plans effective January 1, 2017 (total funds of $14.4 million)
- Reflect $20 monthly premium increase for Medicare Advantage premium plan members effective January 1, 2017 (total funds of $10.5 million)
- Increase funds to raise the five-year benefit limit for children's hearing aids from $3,000 to $6,000 (total funds of $9,471)
- Reduce funds to reflect savings attributable to Medicare Advantage rates in plan year 2017 ($19.5 million)
- Reduce funds to reflect projected dependent verification audit savings ($27.6 million)
- Increase funds to reflect growth to match Medicaid age requirements for the treatment of autism spectrum disorders effective January 1, 2018 ($1.1 million)
- Recognize plan savings attributable to pharmacy benefit management strategies such as enhanced compound pharmacy management ($42.29 million).
There were limited inquiries about either of the DCH budgets. Rep. Matt Dollar (R-Marietta) asked about using the Tenet moneys and in particular about ongoing costs after being funded for the first year. Commissioner Berry indicated that DCH had discussed with the Office of Planning and Budget ways to backfill those efforts once the funds were expended. Rep. Michele Henson (D-Stone Mountain) asked about reimbursements for dentists and other providers. Commissioner Berry indicated he would be pleased to talk further about the dentists' rates of reimbursement but the only providers in the Budgets under review were for select codes for primary care and OB/GYN physicians. Rep. Henson reminded Commissioner Berry that dentists had not received increases in a number of years.
Department of Human Services and Division of Family and Children Services
In a joint presentation, Commissioner Robyn Crittenden and Division of Family and Children Services Director Bobby Cagle outlined the Budgets for the Committees. For FY 2017 Amended, the Governor proposed $684.1 million with an increase of $42.1 million. In total for FY 2018, DHS is proposed to receive $732 million in State funds; there is an addition of $90.2 million proposed.
Among "accomplishments" for FY 2016, Commissioner Crittenden outlined that the Division of Aging Services had served 95,682 meals to clients. They had also helped transition 204 individuals from nursing homes into community settings. They investigated abuse, neglect, and exploitation of vulnerable adults which resulted in 490 people being charged with criminal actions. They also raised awareness about senior hunger by hosting the Senior Hunger Summit and provided at-risk Adult Crime Tactics training to 450 law enforcement officers, prosecutors, first responders and other mandated reporters of abuse, neglect and exploitation of vulnerable adults. In FY 2017, the Division of Aging seeks in the FY 2017 Amended Budget to:
- Increase the numbers of folks served through home-delivered meal and congregate meal sites by 9 percent
- Increase the number of ACT certified specialists
- Delay nursing facility placement by five additional months for non-Medicaid Home and Community-Based Services participants (now delaying such placement for 51 months)
- Increase the number of individuals who transition from nursing facilities back into the community from 125 to 138
- Enroll 240 in the Community Living Program by end of FY 2019 to include a community living program in all 12 AAAs
- Develop a State plan on senior hunger
For Child Support Services in FY 2016, that Division exceeded three federal goals for performance, data reliability and employee support (establish paternity on 90 percent of cases by nearly 4 percentage points; collect 65 percent of the child support arrears by a half of a percentage point; and standards for data efficiency and reliability in an audit of 2015 data). The Division increased child support collections to $740 million; launched a mobile application and an online chat for customers to make payment, obtain information and view scheduled appointments. In FY 2017 Amended, the Division of Child Support's initiatives include increasing the percentage of consistent child support payments (now at 61 percent); increase percentage of past-due child support payments (now at 65 percent); increase total collections of child support (now $740 million); and host outreach events, educating parents on programs which assist with gaining employment to meet child support obligations.
In FY 2018, DHS is projected to have an increase of 11 Adult Protective Services supervisors at a cost of $766,484; added funds for additional non-Medicaid Home and Community Based Services slots of $4.2 million (there are 9,843 individuals on a waiting list which to fully fund would be approximately $22 million); and more funding in the amount of $750,000 for delivery of home delivered and congregate meal services (again, to fully fund this waiting list would be $10.1 million).
Commissioner Crittenden also talked about Georgia Gateway (the State's Integrated Eligibility System) which is the State's largest IT project in its history. It will be a single point of entry to access services for Medicaid, PeachCare, SNAP, TANF, WIC, CAPS, and home energy assistance (LIHEAP). It will be piloted in Henry County starting in February and will roll statewide in 2017. DHS is proposed to receive $13.4 million for this integrated eligibility system project. Another $10.9 million for the Georgia Gateway project is included in FY 2018.
Another area which Commissioner Crittenden outlined in need of added funding is for the Office of Human Resources. DHS has about 9,000 employees but only 60 human resource specialists. Best practices ratios are 1:100; DHS is operating at 1:150. The Budget for FY 2018 has more than $2.5 million for 25 more human resource specialists.
Director Cagle spoke about the Division's implementation of Blue Print for Change which has three major components: robust workforce development; practice model adoption and implementation; and constituent engagement. The average caseload for child protective services workers is 19; the annual starting salary for these workers with a bachelor's degree is $28,005. The number of reports of abuse and neglect received annually is 148,127. Turnover rates for these workers is 32 percent.
Cagle noted that Georgia's foster care population has increased which has driven a need for more foster homes. DFCS strives to keep children connected to their families as well as their communities to lessen the trauma on a child. There are 13,117 children in DFCS care as of November 2016. (There were 11,719 in November 2015.)
In FY 2017, DFCS is proposed to have an increase of $28.6 million for growth in out-of-home care utilization.
The Budget for FY 2018 contains additions of more than $66 million:
- $25.8 million for an increase in funding for salaries for child welfare services workers by an average of 19 percent
- $2.8 million for 80 additional employees for foster care support services
- $2.5 million for 27 additional employees to fully implement the supervisor-mentor program
- $30.8 million for growth in out-of-home care utilization
- Almost $3.9 million for funding DFCS foster parent per diem rates by 57 percent
There are some transfers of child care services to the Department of Early Care and Learning. There is movement of more than $9.7 million for the Childcare and Parent Services (CAPS) eligibility services.
Rep. Regina Quick (R-Athens) asked about the passage of HB 887 and prioritizing relative placements. Director Cagle said he values the relative placement because it is less traumatic for a child to be placed with family. Previously, family placements were around 17 percent; DFCS has increased those placements to 28 percent. However, DFCS's goal is to have family placements at 50 percent by the end of 2018. Rep. Quick inquired about what criteria was used with existing cases to work towards that goal. Director Cagle indicated DFCS would look at an appropriate relative; whether the child's well being would be good – would the child be safe; and what was involved in moving the child. Sen. Renee Unterman (R-Buford) inquired about the 13,117 who are in foster care. Her inquiries were about the numbers and percentages of those children's parents that had issues with addiction. Director Cagle did not have those current numbers but stated he could get that information. He did state that 38 percent of all removed children over the last three years are removed from homes because of addiction – and those numbers are increasing. Another question was raised about the Georgia Gateway system and what the value of that contract was and whether it was managed by the Georgia Technology Authority. The Georgia Gateway effort is now under the management of DHS although the Georgia Technology Authority has worked with the Department on the effort. Sen. Unterman asked for the contract. Rep. Andy Welch (R-McDonough) asked about the implementation of HB 905 (regarding inspections) and digital record keeping. The legislation requires that DHS work with DFCS and DJJ to coordinate child care facility inspections. Crittenden indicated that 89 such inspections had been coordinated and that in October of 2016, the three State entities entered into a memorandum of agreement on the inspections. DHS has also brought on additional staff for appeals and Commissioner Crittenden indicated that there has been significant progress on the inspections.
Technical College System of Georgia
Gretchen Corbin spoke on behalf of the Technical College System of Georgia (TCSG). She provided an update on TCSG and provided budget recommendations to the Committee. She said that workforce development is the mission of TCSG. She indicated that over 133,000 students were enrolled in technical colleges in 2016. Additionally, there were 287,000 trainees who went through economic development programs and 45,000 Georgians who were enrolled in adult education courses in 2016. TCSG has 22 colleges located on 86 campuses and offers over 600 programs nationwide. The graduation rate in technical colleges is up 9 percent. 88 percent of students continue into a career in the same area they studied. The job placement rate for such individuals is 99 percent.
She discussed the Move on When Ready program, indicating that student population has increased by 45.2% this year. In their partnership with colleges and high schools, TCSG taught around 14,000 Move on When Ready students last year. Georgia Northwestern has the largest number of such students in the State. She discussed one student who, at the age of 19, is now making a salary of around $40,000 a year after receiving an education in welding.
For adult education, the GED pass rate is up by 10% and the number of adults who have a high school degree has also improved. Regarding economic development, she discussed Georgia's 'Quick Start' program which has been named as the number one workforce development program in the nation for seven years in row. The program is a free customizable training program that is utilized by the Department of Economic Development. She discussed TCSG's partnership with the Department of Corrections, which provides technical education in prisons. They are now providing such services in 22 of 23 prisons around the State. 289 students have been enrolled in the Georgia Film Academy. She discussed the Governor's announcement about a Georgia Cyber Innovation and Training Center in Augusta. They will be partnering with Augusta Technical College and Georgia Quick Start.
Mrs. Corbin provided a brief operational update. They have implemented co requisite remediation this year at all their colleges, which allows students to get educational support while taking courses at the same time. She also discussed the Strategic Industries Workforce Development Grant. In the FY 2017 Amended Budget, Governor Deal included "industrial maintenance" as one of the professions covered under the grant.
TCSG FY 2017 Amended Budget request amounts to $350,088,334, which includes one change:
- $52,169 for merit system assessments
Their FY 2018 Budget recommendation is for $359,876,203, which includes the following requests:
- $9,840,038 across all of TCSG programs, which is reflective of statewide changes of merit-based recruitment and retention, ERS and TRS increases, and for the state self insurance and merit system assessment.
- $1,176,611, which would provide for a 2% increase in square footage.
FY 2018 capital outlay recommendation amounts to $115,860,000, which includes the following requests:
- $8 million for MR&R
- $5 million for world class lab renovations
- $5 million for replacing obsolete equipment
- $3.88 million for new equipment at a new technical college in Henry County
- $2.2 million for the Clarkesville campus expansion
- $73 million for Lanier Technical College expansion.
- $18,780,000 for expansion at Georgia Northwestern Technical College
Sen. Frank Ginn asked how TCSG distinguishes between a Technical College program and a University System program. She said there are 28 general education courses that can be transferred to University System of Georgia schools. She said their core mission is improving and providing courses for technical education.
Georgia Board of Regents
Chancellor Steve Wrigley presented on behalf of the Board of Regents and the University System of Georgia (USG). USG currently maintains 28 institutions serving over 320,000 students. The annual economic impact of USG is $15.5 billion. He said that knowledge creation and knowledge transfer are the two most important factors in determining whether we compete and prosper in today's world. USG's priorities include ensuring that more Georgians enter the workforce with college credentials. He predicted that, in the future, 66 percent of Georgia's workforce will need a college education; however only 47 percent have such an education currently. Since 2011, students earning college degrees annually have increased by 14 percent. In order to meet workforce demands, the number of such students needs to rise at a rate of 3 percent each year. He indicated that they are changing their approach to teaching to place more emphasis on student success.
Chancellor Wrigley addressed the campus consolidation process, indicating that there were 35 institutions within USG six years ago. There are now 28 such institutions. Last week they announced another round of consolidations, which will involve Georgia Southern University and Armstrong State University, as well as Abraham Baldwin Agricultural College and Bainbridge State College. He said the main driver behind consolidation is the benefit it provides students by allowing the reallocation of funds to invest in faculty and students in the classroom.
Shelly Nickel provided the Board of Regents' FY 2017 Amended and FY 2018 Budget recommendations for the University System of Georgia. The FY 2017 Amended Budget includes:
- $11.3 million for the University System of Georgia and its pass-through organizations
- $2.3 million to establish the Georgia Center for Early Language and Literacy, which will be located at Georgia College and State University. This center has the full support of the Governor.
- $1 million in matching funds, each year for five years (a total of $5 million) for the federal Advanced Functional Fabrics of America grants, which aims to "revolutionize" the fiber and textile industry through commercialization of highly functional advanced fibers and textiles for the defense and commercial markets.
- $375,000 in one time funds to support veterinary medicine research and forestry initiatives at the University of Georgia.
- $1.5 million in one time funds to relocate the state records center which holds the state archives. GBA owns and intends to sell the facility, so they must relocate. The cost includes new shelving and the purchase of the new facility.
- $6.1 million to support the Georgia Department of Public Health's Division of Communications.
- $2.5 million to go to the Georgia Military College for facility improvements.
The Board of Regents' recommendation for the FY 2018 Budget includes:
- $66.7 million to support enrollment growth.
- $3.4 million to provide funding for maintenance and operation for new space.
- $9.9 million to cover the State's share of the increase associated with health insurance cost (2.6 percent, which is below the national trend of 8%) and retirees' health benefits.
- $34.7 million to cover employee's retirement benefits due to the increase in the TRS contribution rate from 14.27 percent to 16.81 percent which becomes effective on July 1, 2017.
- $43 million for 2 percent merit pay increase for faculty and staff for the university system.
- Reduction of $8 million to reverse MRR cash funds included in the FY 2017 budget, but will not continue in FY 2018.
- $2.7 million to establish the Center for Early Language and Literacy.
- $763,000 for UGA's Agricultural Experiment Station.
- Reduction of $1.23 million to the Graduate Medical Education Initiative. The funds are being transferred to Board for Physician Workforce to support 83 new residency slots.
- $2.1 million relates to a decrease in premiums to be charged by DOAS in FY 2018.
Our 2017 Georgia Capitol team consists of Stan Jones, Helen Sloat, Chuck Clay, George Ray, and Logan Fletcher. We will also try our hand at tweeting this year – so follow us! @GDR_Live
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.