New Taxes for Georgians

After two months of working behind the scenes, it’s decision time for lawmakers on state taxes.

In coming weeks, legislators will decide whether to vote on a comprehensive plan to rewrite Georgia’s tax code, a proposal that could lead to higher taxes on groceries, cigarettes, person-to-person car sales and services. The proposal also would lower income taxes for most Georgians.

Or legislators will decide whether to vote on bits and pieces of the plan.

To gauge support — or lack of support — for the plan, The Atlanta Journal-Constitution interviewed 20 lawmakers last week on six key parts of the proposal. Most support lowering income taxes, but many lawmakers acknowledged that the state also needs to raise enough revenue to pay for services like schools and health care.

“It has to be balanced,” said Rep. Don Parsons, R-Marietta. “We can’t have a bunch of cuts in taxes without trying to balance it somehow.”

Putting off the tax-code reform during the 2011 session might kill the idea for a while. Few lawmakers will want to address it in 2012, an election year for all 236 lawmakers.

But many of those interviewed by the AJC argued that the state tax code has to change with the times.

“We have an income tax code from the Depression, we have a sales tax code from the 1950s, and we’re now starting the second decade of the 21st century,” said state Sen. Doug Stoner, D-Smyrna.

PROPOSED CHANGES

Grocery tax

Lawmakers were split on this issue, with more Republicans than not willing to consider it if paired with lowering income taxes. Democrats generally oppose it.

The plan calls for the state to begin charging its 4 percent sales tax on all groceries. Supporters say it is a tax everybody — including those who don’t file state income tax returns — would pay.

“It would be the most consistent source of revenue. Everybody has to eat,” said Sen. Butch Miller, R-Gainesville.

But Democrats worry that it would most hurt the poor and middle class, who spend a greater portion of their income on food.

Sen. Vincent Fort, D-Atlanta, said he couldn’t vote for any bill that included a grocery tax. “No, absolutely never,” he said.

Not all Republicans are sold on it either. “I don’t vote for tax increases,” Rep. Alan Powell, R-Hartwell, said when asked about it.

Income tax on retirees

The plan calls for the state to eliminate exemptions on certain non-work income, such as investments and pensions, for senior citizens. It would not affect Social Security or most disability payments.

Under state law, the first $35,000 per person, or $70,000 per couple, of non-work income for seniors is exempt. Starting in 2012, the state will begin completely phasing out taxes on seniors for non-work income.

Lawmakers were mixed on the issue. Some said there was no way they would take the exemption away from seniors. Others said it needs to be considered.

Rep. Nikki Randall, D-Macon, said she might support keeping the exemption for lower-income seniors.

“Some seniors have a whole lot more in investments than others, so I think it should be means-tested,” she said.

But Cooper said lawmakers would be breaking a promise they made in recent years to seniors if they eliminated the tax break.

“I have real trouble when they make promises to people and then renege on those promises,” she said.

Income tax

The tradeoff for raising grocery and other taxes would be a drop in state income taxes, from a top rate of 6 percent to 4 percent or less.

Republicans have long argued that the state should be taxing things people buy or spend money on instead of the income they earn.

“I would like to see a greater reduction in income taxes and a move solely toward a consumption tax,” said Rep. Tim Bearden, R-Villa Rica. “I would like to basically see an elimination of the income tax.”

Opponents say the tradeoff would result in the poor and lower middle class paying more in taxes.

“I think in reality, if we are going to tax groceries, for someone earning $50,000 a year, they will pay more in sales taxes than the reduction they receive in income taxes,” Stoner said. “I don’t think that has been well thought out.”

Taxes on services

The tax council has proposed extending Georgia’s 4 percent sales tax to a host of services never before taxed, including veterinary procedures, tire rotation, haircuts and country club memberships and dozens more.

While the issue is far from settled, two-thirds of Republicans surveyed either were opposed to taxing services or were undecided.

“My wife is a hairdresser. It will impact me and my family personally,” Rep. Brett Harrell, R-Snellville, said.

Like many Republicans, Harrell said he is concerned that many will see it as a tax hike on families and would only support it if balanced with income tax cuts.

Rep. Ben Harbin, R-Evans, said he did not think the idea had much traction with voters. “The thought of having to pay taxes on haircuts, or pay taxes on services ... people just aren’t comfortable with that,” he said.

Others said the idea is at least worth considering.

“Desperate times call for desperate measures,” Randall said. “It’s obvious that our state is going through some desperate times.”

Cigarette tax

The tax council recommends Georgia’s 37-cent tax on a pack of cigarettes be raised to 68 cents. The proposed tax is an average of the surrounding states, but it would be the second highest next to Florida’s $1.34.

Opinion is split among lawmakers on raising the tax, with a slight edge toward approving an increase. Democrats generally support increasing the tax, which is among the nation’s lowest. Republican sentiment is more divided.

“I’m against any tax increase,” said Rep. Mark Hatfield, R-Waycross, summarizing the feelings several GOP lawmakers surveyed.

Pak said he could support increasing the tax if it was part of an effort to reduce health care costs by discouraging smoking. But there is a limit, he said.

“I think the American Cancer Society wanted to raise it a dollar, but if you raise it a dollar you are going to kill businesses on the border,” he said.

Rep. Sharon Cooper, R-Marietta, said she would support raising the tax because she believes it would result in fewer young people starting smoking.

“I’m a nurse. I’ve held people’s hands when they are dying, gasping for breath,” she said.

Casual sales tax

The plan recommends the state collect sales tax on private sales of cars, boats and airplanes. The tax already is collected from dealers.

The tax council believes it could generate about $150 million in state taxes annually, but many legislators have yet to form a hard opinion on it.

Rep. Ron Stephens, R-Savannah, said he could support the tax as part of a comprehensive overhaul.

“Auto dealers are at a competitive disadvantage under the current system,” he said.

Rep. B.J. Pak, R-Lilburn, said he has not made up his mind, but said it would be hard to hit people with a big tax bill when they go to register their car.

“It just seems inherently unfair to do that,” he said.

http://www.ajc.com/news/georgia-politics-elections/lawmakers-talk-tradeoffs-861637.html

Smoke em if ya got em!

ATLANTA — Georgia lawmakers are considering hiking the state's tax on cigarettes from 37 cents to 68 cents per pack, making it one of the highest in the region.

The 84 percent increase is part of a plan set out by the Special Council on Tax Reform and Fairness for Georgians to revamp the state's tax code. The increased tax on smokes would create another $114 million in revenue for the cash-strapped state.

The state's cigarette tax has been 37 cents since 2003, when it was raised 12 cents.

The increase would still keep Georgia among the lowest cigarette taxes in the country. In New York, the tax alone is $4.35, while in Rhode Island it's $3.46 and Michigan it's $2.52.

Georgia: Personal services may face 1st-time tax

By Chris Joyner

The Atlanta Journal-Constitution

5:17 a.m. Monday, February 28, 2011

Kerry Guthrie believes she pays enough taxes.

The owner of My Favorite Mechanic near Candler Park already pays income taxes, payroll taxes, recycling fees and sales tax on auto parts. So she is less than thrilled with a proposal in the Georgia General Assembly to tack a new sales tax onto the labor cost of auto repairs and dozens of other services.

“The amount of tax money I pay out of this place on a weekly basis,” she said, shaking her head. “People already fuss about how much a car repair is.”

Services are excluded from Georgia’s 4 percent sales tax. But a special council convened to rewrite the state’s tax code has called for the state to move away from income taxes and toward consumption taxes. As part of that move, the council recommended that about 50 personal services be taxed for the first time, including haircuts, country club and health club membership fees, shoe repair, veterinary services, lawn care and watch repair.

The problem, as members of the Special Council on Tax Reform and Fairness see it, is that services have become a larger portion of the state economy over the years. That shift means more of the tax burden is placed on businesses that sell goods, and the tax council concluded that is not fair.

It also does not provide a broad enough revenue base for the state, the council concluded in its January report. The state collected nearly $1 billion less in sales taxes in fiscal 2010 than it did four years earlier.

“Not taxing many services means that the tax base has become increasingly narrow, requiring a higher tax rate to obtain the same revenue, and providing an incentive to purchase services rather than tangible property," the council concluded.

David Sjoquist, a Georgia State University economist and tax council member, said the council weighed a number of factors in deciding which services should be taxed.

The council did not want to tax businesses that could leave the state to escape paying them. Most consumer services have to be where the consumers are, as with pest control, he said.

"You can’t really export that,” he said.

Ditto for things like garbage pickup, septic tank cleaning and dry cleaning fees, all of which are on a list of proposed services to be taxed.

The cost to consumers would not be insignificant. If the proposal is adopted as part of an overall approach to tax reform, the addition of a 4 percent sales tax on services is expected to generate $298 million in new revenue for the state. Local governments would add another 3 percent, or 4 percent for the city of Atlanta.

The council said the increase in state sales taxes would be offset by cutting income tax rates by a third over the next three years. But some are skeptical, including Guthrie.

“Just like they were taking the toll off Ga. 400?” she said. “Once it gets set, it doesn’t go away, man.”

Sjoquist said the council is aware the idea is not universally popular, and he acknowledges that collecting taxes on services like haircuts will not be easy.

“A lot of those people are set up as independent contractors and are just leasing the chair,” he said. “You are dealing with lots and lots of small businesses, which is a potential administrative problem, but other states do it.”

The proposal would require a lot of small businesses to start collecting taxes and turning them over the state, meaning new forms and filings for small-time outfits like independent lawn cutters or plumbers. Sjoquist concedes that the new taxes could make tax cheats out of some of these businesses if they did not collect the tax.

“With any very small business there is always that problem," he said.

Some smaller operators who rely on licenses from the state could be tracked down and forced to pay, he said. But he said the state revenue commissioner also has the power to exempt some businesses that account for an insignificant amount of proposed tax.

The council did recommend that some services, like babysitting, not be taxed because it would cost more for the state to collect the tax than it would collect.

Some just do not think the proposal is fair. Sherrie Jones, office manager for Inman Park Animal Hospital, first heard about the proposal to add sales tax to vet bills from the Georgia Veterinary Medical Association, which sent out a legislative alert urging members to mobilize against the plan.

"I was absolutely appalled," Jones said. "I don't feel there should be a tax on services, period."

Jones said she her state representative a message saying so. In addition, Jones said, the proposal calls for taxing health care for animals but not for people. That's not fair, she said.

"It just seems the politicians are not in contact with what is going on in the real world," she said. "You've got people making decisions on how to run a small business who have never done it."

---

The list

Here is the complete list of services the tax council proposes to tax

Clothing services

• Shoe repair, other shoe services
• Repair, alteration, tailoring
• Watch or jewelry repair
• Clothing storage

Household utilities

• Garbage pickup
• Septic tank cleaning
• Water softening

Other household services

• Household appliance/equipment service contracts
• Housekeeping services
• Gardening/lawn care
• Household appliance/equipment repair
• Other home services and small repair jobs around the house
• Home security system service fees
• Installation charges for home electronics

Miscellaneous

• Moving, storage and freight expenses
• Laundry and dry cleaners
• Professional photography fees
• Pet services
• Veterinary expenses
• Haircuts, styling, related services
• Safe deposit box rental
• Downloads of books, music, etc.

Membership fees

• Global positioning services (GPS) such as OnStar
• Golf courses, country clubs and other social organizations, health clubs, swimming pools, fitness and weight-loss centers
• Credit card membership
• Shopping club membership (Sam’s, Costco, etc.)
• Direct or online dating services

Vehicle maintenance, repairs

• Tire purchases and mounting
• Audio equipment and installation
• Video equipment and installation
• Body work and painting
• Clutch or transmission work
• Drive shaft or rear-end work
• Brake work
• Steering or front-end work
• Engine cooling system work
• Motor tune-up
• Oil change, lubrication, oil filter
• Front-end alignment, wheel balancing, wheel rotation
• Shock absorber replacement
• Battery purchase, installation
• Tire repair
• Exhaust system work
• Electrical system work
• Engine repair or replacement
• Vehicle accessories and customization
• Vehicle cleaning services and supplies

Other vehicle-related expenses

• Auto repair service policies
• Towing charges
• Automobile service clubs

Georgia Power Raises Rates

ATLANTA (AP) — Georgia Power's new president said Tuesday that the electric utility had to raise prices to meet stricter emissions rules and maintain its system, but he's considering new ways to help customers cut costs.

W. Paul Bowers, 54, became president and CEO of the largest firm in the Atlanta-based Southern Co.'s network on Dec. 31, just as its customers were hit with a rate increase that will add more than $14 to the monthly power bill for an average home.

Raising prices was necessary to comply with stricter environmental rules on coal-fired power plants, build a new gas-fired plant and maintain the company's transmission network, Bowers told The Associated Press in an interview. Critics assailed Bowers' company for raising rates during an economic downturn that pushed unemployment to 10.1 percent, although Bowers said his firm invested billions of dollars in its business even in a sour economy.

"We didn't stop it because our customers expect the lights to stay on, they expect us to be compliant with environmental law and they want us to have power for the growth of the future," Bowers said.

Last month, Georgia's utility regulators at the Public Service Commission approved a settlement that not only hiked bills, but also gave Bowers' company the ability to more quickly raise prices should its earnings fall below set targets. Normally, Georgia Power must file a new case with the commission to raise rates, a process that takes months, involves testimony, analysts and a greater say for critics.

When asked, Bowers said he could not rule out another price increase before the current settlement expires in 2014, particularly if Georgia suffers another deep recession.

"I hope not," Bowers said. "You know, you never know."

Georgia Power sought permission in July to more rapidly change its prices after weathering a drop in electricity usage and revenue during the Great Recession. Bowers, formerly Southern Co.'s chief financial officer, said he watched as the Southern Co.'s power system went from adding up to 70,000 new customers annually to a net growth of less than 100 new customers in 2009.

"That made us step back and say, 'Is the three-year rate plan process the right process, and is there a way that we can adjust during these ups and downs in the economy?'" Bowers said.

Bowers said his goals include giving customers more control over their electricity bills. For example, Bowers said Georgia Power is researching whether customers are willing to install systems that automatically turn off major appliances such as air conditioners when electricity costs peak, typically in the early evening.

Sensors installed on the compressor of an air conditioner can detect signals from the power grid and shut down the cooling system. Georgia Power experimented with a similar plan in the 1990s, although Bowers said customers never embraced it. If there's enough demand, a new pricing plan could be created in six months to two years, Bowers said.

Industry executives are still debating how much money residents must save before they will voluntarily change their electricity usage. Bowers estimated that a system capable of shutting off air conditioners during peak times might shave a few dollars off a monthly household bill. That's not much compared to the $22 monthly increases that average Georgia Power households will see by 2013.

"Is that going to be of value to the customer?" he said. "When they walk in and it's a little bit warmer in their home, are they going to accept that? Or do they want to be a little bit more comfortable? And that's a choice that consumers got to make."

Bowers said his biggest long-term challenges include overseeing the construction of two nuclear reactors at Plant Vogtle near Waynesboro. It's a project with big stakes for the entire nuclear industry. If completed, Georgia Power and its partners could be among the first in a generation to win permission to build a new reactor.

The federal government last gave permission to build a nuclear plant in 1978, just as shrinking electricity demand, a poor economy and an accident at a reactor at Three Mile Island in Pennsylvania brought the industry to a near standstill. Cost overruns and delays were endemic.

In a departure from the past, Georgia Power has picked a standard, off-the-shelf reactor for the Vogtle expansion rather than a custom model, Bowers said. He also expects the utility will benefit from a streamlined review process from the Nuclear Regulatory Commission.

He argued that the Southern Co. subsidiary was uniquely positioned to build the capital-intensive project since the firm is large, has access to cash and experience with big construction projects. He said going forward now, rather than waiting, gave the utility more bargaining leverage.

"There is a benefit of being first associated with the first mover," Bowers said, adding that Westinghouse Electric Co., the reactor supplier, and The Shaw Group, the construction contractor, are using Plant Vogtle as a demonstration project.

"This will be the first one in the United States," he said. "They want it to be successful."

Southern states face highest insurance premium hikes

By Misty Williams

The Atlanta Journal-Constitution

Georgia and other Southern states have faced some of the nation's biggest spikes in health insurance premiums in recent years, far outpacing family income growth, a recent study shows.

From 2003 to 2009, insurance premiums for Georgia families jumped 48 percent on average from $8,641 to $12,792, compared with a 41 percent hike nationally, according to a report by The Commonwealth Fund, a nonprofit that focuses on health care policy.

Meanwhile, incomes have failed to keep up with premium increases, the study shows.

Nationwide, premiums made up more than one-fifth of median household incomes for people under the age of 65 in 10 states, many of them in the South and south central U.S., where incomes tend to be lower, according to data from the Medical Expenditure Panel Survey. In Georgia, the average premium accounted for 18.9 percent of median household income in 2009.

“The effect this has had, especially during these difficult economic times, is to force families to trade off wages for benefits or make other difficult choices to balance their family budgets,” Karen Davis, The Commonwealth Fund president, said in an e-mail.

Rising health care costs are also a major problem for entrepreneurs and small business owners, who are finding it increasingly unaffordable, said Ken Thorpe, a health policy professor at Emory University.

“You’re seeing fewer of them offer coverage over time,” he said.

Insurance costs are explicitly linked to what employers are able to pay their workers, said Tim Sweeney, a health care policy analyst with the Georgia Budget and Policy Institute.

“They have to decide where to put their money,” Sweeney said. "Employees want that health coverage.”

Overall increases in insurance costs are also closely tied to the widespread growth of chronic illnesses, such as diabetes and obesity, Thorpe said. Chronic illnesses in adults tend to be more prevalent in the South, compared with Colorado, California or other Western states, where there are often healthier food choices and people are generally more active, he said.

Unless something is done about the growth in chronic illnesses, it’s going to be difficult to get insurance costs down, Thorpe said. “That’s a real challenge moving forward,” he added.

Third Party Park Atlanta Handing Out Tickets Willy-Nilly

ATLANTA -- Some Atlanta residents said they are fuming after getting parking tickets in front of their own homes.The city-contracted private company, Park Atlanta, gave David Kwon and his wife a ticket for parking in the wrong direction along their quiet, residential street.People living all over the city are making similar complaints.“To get a ticket like that, it just kind of feels like a slap in the face honestly,” said David Kwon's wife.

Family health costs soar 14% in 2010

Parija Kavilanz, senior writer, On Thursday September 2, 2010, 1:17 pm EDT

American workers are taking yet another blow to their wallets this year -- a whopping 14% jump in costs to insure their families.

The spike comes even as premiums for family coverage rose only 3%. This discrepancy is a result of cost-conscious companies shifting more of the insurance burden onto employees.

Employees are paying about $4,000 to buy family insurance in 2010, $482 more than they did last year, the Kaiser Family Foundation said Thursday.

Companies still pay the bulk -- nearly $9,800 for a family of four -- but that was down a little from 2009.

The Kaiser survey was conducted between January and May 2010 and polled more than 3,000 employers nationwide.

Over the past five years, employees share of insurance premiums have risen 47%. That has outpaced a 27% jump in overall premiums and an 18% increase in wages, according to Kaiser.

Deborah Chollet, senior fellow and health economist with Washington-based Mathematica Policy Research, said the recession and a turbulent job market are key catalysts for rising insurance costs.

"Employers are struggling to keep their head above water. They're cutting costs just to maintain employment," Chollet said. "One way to do that is to make workers pay more."

In a strong job market a higher turnover rate actually helps companies contain increases in insurance costs, without having to increase workers' share of the expenses.

"New workers spend some time getting acclimated to their new jobs. They may not use their health benefits for a while," said Tracy Watts, senior health care consultant with leading benefits consulting firm Mercer.

In a down economy, the turnover rate is lower and existing employees tend to use their benefits more.

Another factor pushing up insurance costs is a trend whereby young employed adults forgo buying coverage as a way to save money, until they absolutely have to, she said.

This is a big risk for companies, because it can suddenly inflate their health care costs if there's an unexpected rise in the number of sick people buying insurance.

Health reform, Chollet said, may not offset all of the costs but it can help stabilize the overall market.

"The hope is that with reform, there's an increase in the number of insured people and this will help drive down the big increase," she said.

But others aren't so sure. They say employees could see even higher costs in their plans come open enrollment for 2011.

"Next year, the increases could be even bigger," said Gary Claxton, vice president with the Kaiser Family foundation. "We've heard stories about insurers asking for bigger employee contributions for next year's coverage."

Watts said she's not aware of any factor that could help drive down costs in the near term.

"Health reform mandates new levels of coverage that will increase employers' costs at least until 2014.," she said

For example, beginning next year, employers will have to provide coverage for dependents of employees till age 26.

City Council Member makes $800K per year

How a city manager of a small, poor CA town made $787K

Not a good year for Bell city manager Robert Rizzo. In March, he was arrested

on suspicion of drunken driving. Last week, the Times reported he makes $787K a year. (Courtesy of AP)

The number defies logic. Yet there it is, in the LA Times, for all the world to see: 787,637. That's the annual salary for Robert Rizzo. He's not a lawyer or a corporate exec. According to a the Times, he's the city administrator for Bell, one of the poorest towns in Los Angeles County (map).

Rizzo isn't the only one with a big fat paycheck. Two other Bell employees are pulling in astronomical incomes. Assistant City Manager Angela Spaccia makes $376,288 and Police Chief Randy Adams makes $457,000.

To put things in perspective, the Times listed the annual salaries of other public servants who have to run bigger places like Los Angeles, California and, oh, the United States. Here's a rundown of salaries:

Bell Chief Administrative officer Robert Rizzo: $787,637
-- Los Angeles City Administrative Officer Miguel Santana: $256,803
-- Gov. Arnold Schwarzenegger: $173,987 (Schwarzenegger has declined to take his salary)
-- President Barack Obama: $400,000

Bell Police Chief Randy Adams, $457,000
(Oversees a department with 46 personnel; 33 are sworn officers)
-- Los Angeles Police Chief Charlie Beck $307,000
(Oversees 12,899 personnel; 9,959 are sworn officers)

Bell resident Eddie Delgado, 16, shows off his "corruption" tee. (Courtesy of AP)

If these figures aren't enough to make you choke on your Cheerios this morning, Rizzo's response might. In response to the scandal, Rizzo, who received his bachelor's from UC Berkeley and his master's from Cal State East Bay, told the Times:

"If that's a number people choke on, maybe I'm in the wrong business. I could go into private business and make that money. This council has compensated me for the job I've done."

The City Council has compensated themselves well, too, thanks to a ballot initiative. In 2005, California approved a law that placed salary caps for council members in "general law cities." That same year, Bell leaders approved a special election (which, by the way, cost $40,000 to $60,000) with one ballot item that would give Bell charter status, according to today's Time story. The measure passed, allowing council members to earn huge wages for serving on boards and commissions. Council members make $7,873.25 each month -- for part-time work. They also approved a contract that gave Rizzo an annual raise of 12%.

The rise of Rizzo's salary.
1993: $72,000
2004: 300,000
2005: $442,000
Current: $787,637

The fallout has been swift and fierce. Since the story ran last week, the county D.A.'s office and the state are opening investigations, while Rizzo, Spaccia and Adams are quitting. And while they won't get severance packages, Rizzo is entitled to a state pension of $650,000 a year for life.

Cue the choking.

U.S. post office looks to cut costs as mail drops

Tue Mar 2, 2010 2:26pm EST

* Price hike and service changes seen

WASHINGTON, March 2 (Reuters) - The U.S. Postal Service, faced with a dwindling number of customers and growing shortfalls, plans to raise prices, cut costs and ask for rule changes to make the struggling service more flexible, Postmaster General John Potter said on Tuesday.

Because of email and private delivery companies, mail volume is expected to be down about 10 billion pieces in 2010 with first class mail expected to drop 37 percent by 2020, leaving the service with a cumulative shortfall that could hit $238 billion by 2020, USPS said in a press release.

"A modest exigent price increase will be proposed, effective in 2011," it said.

USPS, which delivers nearly half of the world's mail, has posted net losses since 2007. It faces stiff competition from email as well as FedEx (FDX.N) and United Parcel Service (UPS.N).

Potter outlined a series of efforts to save money, including restructuring retiree health benefits, changing delivery schedules, and expanding efforts to sell stamps and provide other services online and at grocery stores and other retailers.

"If given the flexibility to respond to an evolving marketplace, the postal service will continue to be an integral part of the fabric of American life," Potter said in the release.

In February, USPS posted a loss of $297 million for the first quarter of its fiscal year, blaming the recession and the use of electronic mail.

The loss marked a slight improvement over the prior-year period due to cost cutting, but USPS warned the trend was worrisome.

Further, it warned it may not be able to meet obligations to make about $6.6 billion in cash payments in September and October to fund retiree health benefits and for its workers' compensation liability. Last year Congress restructured similar payments, but there is no assurance that similar adjustments will be made this year, USPS said.

DeKalb to close four schools and lose 15 bigwigs. Gwinnett sets furlough days.

2:39 pm February 19, 2010, by Maureen Downey

The budget axe is falling on four schools and the central office staff in DeKalb County where Superintendent Crawford Lewis announced Friday, “We can no longer afford to operate schools which are at half capacity.” Lewis said he will pare his cabinet back from 27 administrators to about 12, a move that should placate critics who contend that the central office is full of people who don’t have a real impact on student learning in the county.

The financially struggling DeKalb school system – the deficit is now at $88 million from state cuts and falling revenue — will name the four elementary schools that will close next week, choosing from among 29 schools with enrollments of less than 300 students.

According to the AJC story on DeKalb:

District officials are eyeing schools in south DeKalb now that Dunwoody has become the fastest-growing area of the county, Lewis said.

The Citizens Planning Task Force, a group of 20 residents appointed by school board members, will work with school officials to make a recommendation on which schools to close. The board will then vote on the final closings, school system spokesman Dale Davis said.

Last year, DeKalb’s enrollment grew by about 1,500 students to 101,000 children.

The school closings will allow the district to save about $2.5 million. Teachers from those schools will move with their students and be allowed to keep their jobs, but some other staff may be affected, Davis said.

The closings will mean the district will have to redraw the attendance boundaries and reroute buses before school starts in August.

The school closures are part of a systemwide trimming to meet a loss in state funding and property tax revenue.

“We are working really, really hard not to raise anyone’s taxes,” Lewis said.

Last month, Lewis proposed a series of program cuts, staff furloughs and other reductions to meet what officials thought was a $56 million deficit. He now is scrambling to identify $32 million more to cut from next year’s budget after learning the county’s property values dove 6.7 percent.

“This year’s budget will go back to the figure we had in 2005. That kind of tells you exactly how bad things are,” Lewis said.

Lewis said he will unveil those additional proposed cuts next Friday.

The district has about 14,000 full-time employees, including 8,000 teachers.

The proposed administrative cuts come less than a week after the AJC reported that the district posted a job to replace a deputy superintendent of teaching and learning for $163,900 while calling for teacher pay cuts.

The other staff in his cabinet will see pay cuts, Lewis said.

However, the superintendent does not plan to give back the $15,000 raise and contract extension that the board approved in January. Lewis told business leaders that the raise comes after he lost $30,000 in salary and bonuses last year.

“I don’t think $15,000 is going to have a profound impact on an $88 million deficit,” he added.

DeKalb’s actions are likely to be repeated around the state as all systems face unprecedented deficits. To cut costs, Gwinnett County has just scheduled three furlough days for employees next school year and will raise class size by one student, according to the AJC.

Can we still see academic gains with this level of budget crisis?

GA College tuition hikes get support from strapped lawmakers

College tuition hikes get support from strapped lawmakers

10:27 am February 24, 2010, by Aaron Gould Sheinin

It would take a 77 percent tuition increase at Georgia’s colleges and universities to meet the demand for a $385 million cut in the state’s higher education system budget, Chancellor Erroll Davis said Wednesday.

Davis, speaking before a sometimes testy joint House-Senate budget committee, said that would raise tuition at the research universities to more than $10,000 a year, while four-year colleges would raise to more than $6,700 and two-year college tuition would grow to more than $4,000.

But it took some time for Davis to get to that point. Sen. Seth Harp (R-Midland) interrupted Davis as the chancellor was explaining how dire the university system’s financial situation is.

“We are in a budget crisis,” Harp said. “I fully appreciate what you have offered. We are familiar with this. We have got to cut another $200 to $300 million out of your budget. Please, prioritize where those cuts will come or we will do it blindly.”

But Davis did not bring suggested cuts, arguing instead that the university system has already cut $360 million since July 1, 2008. Davis said he has not yet had a chance to speak to all 35 college presidents to discuss specific cuts, although he promised to provide lawmakers with ideas by Friday. Cuts will have to come from individual schools, he said, as there are few system-wide programs at the regents’ office that can be eliminated.

But Davis said he does not believe it is possible to cut $385 million from the system. That, he said, would total the entire budget for 23 universities. It is barely more than the University of Georgia’s annual budget.

Still, Davis could not immediately answer some questions, such as when Rep. Austin Scott (R-Tifton) asked how many employees of the system have total compensation packages of more than $500,000. A quick check of state salary data at opengeorgia.gov, however, shows a handful of university system employees making that much, including Davis himself and UGA President Michael Adams. Nor could Davis answer Rep. Bob Lane (R-Statesboro), who asked how much a 1 percent salary cut would save the system. A quick check of the 2010 state budget however, shows that a 1 percent cut to the systems’ teaching budget, the overwhelming majority of which goes to salaries, would save $1.9 million.

Harp said everything is on the table: Big tuition cuts, salary cuts, closing or consolidating schools.

“We are now where the state of Georgia does not have enough money to complete this fiscal year,” Harp said. “Please, we need definitive ideas, suggestions where to come up with that money by Friday. I hope you can do that. If you can’t, you put it on the folks of this committee to do it. And we do not know the best way.”

If tuition has to raise by 77 percent, “so be it,” Harp said. “If we have to break the promise of locking in tuition, we have to break the promise. It’s not something we wanted but I cannot emphasize enough we do not have the money.”

There were mixed feelings on the committee about tuition increases, however. Sen. Don Balfour (R-Snellville) said students and parents are the only ones who can pay.

“We’re becoming a socialist society when we say that you shouldn’t raise tuition at all,” Balfour said, adding that his son attends college in Georgia and that tuition “is embarrassingly cheap.”

“I don’t want a commitment from you you’re not going not going to raise tuition,” Balfour said. “I’d rather have a commitment from you that you are. The only group of people who can pay is the people taking the course.”

But Rep. Bill Hembree (R-Winston) said tuition increases cannot happen without the university system doing everything in its power to first reduce spending.

“We all know there are inefficiencies, excessive costs,” Hembree said. “If we walk away from this session without having cut somewhere in this system … then we have failed. If you go back and raise tuition, I for one will not stand for it.”

Hembree said a “modest” tuition increase might be acceptable if it’s accompanied by significant cuts.

Davis didn’t disagree that some savings can be found. And they will find it, he said.

“While I am here to agree there are room for improvements, I’m not able to say there are efficiencies that equal the total budgets of 23 of our 35 institutions,” he said.

DeKalb schools chief proposes cutting 148 positions

By Megan Matteucci

The Atlanta Journal-Constitution

11:39 a.m. Wednesday, February 24, 2010

DeKalb County schools’ superintendent is calling for 148 employees to be laid off.

The reduction in staff is necessary to meet a projected $88 million deficit, Superintendent Crawford Lewis told board members Wednesday morning.

The staff cuts will save the district about $10.7 million, Lewis said.

The cuts will be made in all areas of the central office. The 148 positions represent about 15 percent of the district’s 982 employees in the central office, according to Ramona Tyson, the district’s deputy chief superintendent of business operations.

“It does not target one particular group,” Tyson said. “This is to be fair.”

The district is also looking at furloughs or pay cuts, along with closing schools and cutting programs.

Last-Minute Credit Card Tricks

Published: October 16, 2009

The Credit Card Accountability, Responsibility and Disclosure Act, signed into law in May, gave credit card companies a leisurely timetable — as long as 15 months — to phase out predatory practices used to bleed consumers. Not surprisingly, the companies have exploited this generosity by driving already outrageous interest rates still higher and imposing fees that are pushing struggling families further into debt.

Congress can end this injustice by moving up the deadline, accelerating reform and helping consumers.

Some of the worst (and most common) abuses are now scheduled to be outlawed in February. These include the practice of arbitrarily raising interest rates, penalizing customers when they are late paying a bill unrelated to the credit card — so-called universal default — and charging customers interest on debt that they paid off a month or more earlier.

The banks claimed that they needed the long lead time to rework their computer processing system. Consumer advocates warned that this would invite banks and credit card companies to wring as much as possible out of consumers before the law finally took effect.

They were right.

A forthcoming study from the Pew Charitable Trusts’ Safe Credit Cards Project shows that credit card interests rates — already too high — rose by 20 percent in the first two quarters of this year, even though the cost of lending went down as a result of low federal interest rates. In testimony before Congress earlier this month, one consumer advocate cited case after case of struggling consumers who had seen their credit card rates more than double for no apparent reason, even when they had faithfully paid on time.

A House bill introduced by Representative Carolyn Maloney, a Democrat of New York, and Representative Barney Frank, a Democrat of Massachusetts, would halt this exploitation by making the act effective on Dec. 1. The Senate needs to take the same approach.

GA Increases Fines

By Ariel Hart

The Atlanta Journal-Constitution

9:26 a.m. Monday, December 28, 2009

To those who feel the need to speed: Be warned. For the fastest of fast drivers, it’s about to get really expensive.

Going 85 miles per hour or more on most Georgia roads -- including interstates -- will cost a speeder an additional $200, when a new "super-speeder" law takes effect on Friday. On two-lane roads, meaning one lane each way, the extra fine kicks in at 75 mph.

That’s on top of whatever ticket the speeder gets for going over the speed limit.

“It’s a lifesaving law,” said Bob Dallas, director of the Governor’s Office of Highway Safety, noting that speeding makes death or severe injury much more likely when an accident happens.

The original speeding ticket may not tell the offender about the additional state fine, Dallas said. First, the driver will get the local ticket as usual. Then, the state will send a letter notifying the speeder of the $200 fine, which must be paid within 90 days of the letter's date.

“The goal here is to prevent the worst of the worst speeding in the state of Georgia,” Dallas said. “At some point we just have to put an end to the super-speeders and using our roadways as a racetrack. And this is what this law is designed to do.”

Drivers who don’t pay will have their licenses suspended.

The original ticket is no joke either. Local fines -- which range depending on where tickets are issued and the driver's speed -- are commonly well over $100.

In McIntosh County on Georgia's coast, going 34 mph over the speed limit will cost you $1,355, according to the county court clerk’s office. That’s before the new state fine.

At least one local official, Sheriff J. Tyson Stephens of Emanuel County, has called the $200 state fine little more than a tax that will impose an out-of-kilter burden on the working poor.

Dallas said he knew of no other state with a similar law, though some states had tried variations, such as higher fines on problem roads.

The law intended money collected from the fines to fund trauma services, but where it's actually spent will be up to the state Legislature.