Governor Deal?s State of the State Address

In one of the most engaging and far-reaching addresses ever delivered by a Georgia Chief Executive, Nathan Deal embarked Tuesday night upon the path that may ultimately lead to him being recognized as one of our state?s great governors. In challenging economic times, he was able to deliver hope and promise in addressing a number of critical issues. His speech focused largely on job creation and contained thoughtful, science-based approaches to addressing issues faced by Georgians, ranging from education to transportation, healthcare and criminal justice reform.

Education. Deal stressed restoring funding to areas that have been hard hit by cuts in the past. The Governor proposed adding 10 days back to the Pre-K school year and increasing teacher salaries based on training and experience. He also disclosed his plan to allocate new funds for reading programs, charter schools, school nurses, and additional funding to match anticipated enrollment growth at both the primary and post-secondary education levels.

Governor Deal unveiled the new ?Go Build Georgia? program (modeled after a similar program in Alabama) to address the need for more Georgia workers schooled in highly skilled trades. Go Build Georgia will train Georgians in the skilled trades and educate the state?s youth and the general public about the importance of developing skilled workers.

Infrastructure. The Governor highlighted the Savannah Harbor Expansion Project and July?s T-SPLOST vote as examples of how infrastructure has a direct impact on economic development. He identified renovating Georgia?s aging infrastructure as a ?key building block of job creation.? Deal also stressed the importance of enhancing water supply and security while reducing the state?s dependence on the federal government for our water needs.

Healthcare. Governor Deal laid out a new vision for Georgia?s future that will improve health care research and the well-being of Georgia?s residents. He set the goal of Georgia Health Sciences University obtaining the National Cancer Institute?s Cancer Center designation, following in the footsteps of the Winship Cancer Institute at Emory. Expanding cancer research comes at a critical time for the state because Georgia?s cancer death rate currently exceeds the national average. The Governor also proposed funding for 400 new residency positions across the state, creating more opportunities for Georgia?s medical students to serve Georgia?s growing population.

Criminal Justice Reform. Deal proposed additional funding for accountability courts, specifically drug courts, and discussed how changes in the state?s approach to incarceration and rehabilitation are a necessary and viable step forward. Georgia currently has one of the highest incarceration rates in the nation, a fact exacerbated by high recidivism rates. Such courts have a proven track record of successfully treating non-violent offenders (by ?reducing recidivism rates as much as 35 %?) while freeing up needed space in prison for violent and dangerous criminals. Deal also recommended $35.2 million, in addition to the $10 million for accountability courts, for more prison beds to keep up with the expanding prison population.
2012 Legislative Session

The pressure on lawmakers is beginning to ease as state revenues trend upward, and they express a cautious optimism moving into the legislative session. Speaker Ralston has noted that some cuts to the state budget will still be necessary, and Governor Deal has indicated that reducing the size of government will be a focus of his efforts during this year?s legislative session.

Of the many issues that will come before the legislature this year, tax reform is sure to be at the top of the list. There are, however, several other contentious issues destined to come up in the 2012 session.

Regulatory Reform. Speaker David Ralston announced last week that the General Assembly would tackle regulatory reform to address the concerns of small business leaders. Speaker Ralston said that the House will make it a ?priority? to ?lift some of the oppressive regulatory burdens we put on small business.?

Education. The joint Education Finance Study Commission, headed by Rep. Brooks Coleman (R-Duluth) and Sen. Fran Millar (R-Atlanta), will explore options for reforming school funding in light of reduced state revenues and federal funding for education. The issue will undoubtedly cause some heated debate in the 2012 session as the Commission prepares its recommendations for the Governor.

Healthcare. Tea Party Republicans killed a bill backed by Governor Deal and the leadership during the 2011 session designed to implement health insurance exchanges, which would allow individuals to shop for and compare health insurance plans, as required by the 2010 Patient Protection and Affordable Care Act (?Obamacare?).  Governor Deal has indicated that he will not move forward with exchange legislation during the 2012 session pending the outcome of a Supreme Court decision on the federal health care law. If the Court fails to overturn the law, Deal has indicated that the state will craft a plan before an early 2013 deadline. This may mean a special legislative session to address the issue later in the year.
Tax Reform

The Republican leadership will once again attempt comprehensive tax reform in the 2012 session. The focus of 2012 reform efforts will be reducing the state income tax while replacing lost revenue with an increase in consumption-based taxes. A comprehensive reform plan is still a possibility; however, observers at the Capitol note that it is more likely that the legislature will ultimately pass two or three of the recommended changes to the tax code.

Leadership Proposals. GOP leaders have indicated a willingness to explore raising the state sales tax an additional 1%, reinstating the sales tax on food, or raising taxes on tobacco products by as much as one dollar per pack. Some legislators have indicated that reinstating the grocery sales tax has a higher likelihood of being included in a final reform package than the increased tax on cigarettes. The ultimate goal is to provide financial relief to working Georgians by lowering the state income tax from 6% to as low as 3.7%.

Governor Deal?s Proposals. Governor Deal proposed a three-part approach to tax reform geared towards incentivizing business investment in Georgia. Deal has put forth a goal of ?[making] Georgia the number one state in which to do business.? The General Assembly leadership has expressed an interest in several of these proposals, and those that become a reality will likely be included in a larger tax overhaul. Governor Deal?s proposals consist of the following.

?Repealing the Energy Sales Tax. The Governor wants to repeal the sales tax placed on energy used in manufacturing processes ? an idea that enjoys wide support in the legislature.

?Construction Sales Tax Exemption. Deal?s second proposal is a sales and use tax exemption for materials used in construction projects that are ?of regional significance.? The intent of this exemption is to allow local governments increased autonomy in their efforts to incentivize businesses relocating to Georgia.

?Expanding Jobs Tax Credits. The third reform proposal alters the Georgia Job Tax Credit and the Quality Jobs Tax Credit programs by reducing the number of quality jobs an employer must create from 50 to 15 in order to qualify for the credit.
German-American CEOs Focus on Education and Workforce Preparedness with Superintendent Barge

Over the past year, the Chief Executive Officers of prominent German companies operating in the Southeastern United States have gathered to discuss concerns faced by their businesses and employees. Organized by Detlev von Platen, the CEO of Porsche Cars North America, this group has become known as the German-American CEO Roundtable. Participants in the Roundtable include representatives from Siemens, BMW, Mercedes, Volkswagen, Heidelberg, and Prommis Solutions among many others.

Recent meetings of the Roundtable have included guests such as German Ambassador Peter Ammon and Dr. John Barge, State Superintendent of Schools. Dr. Barge is a leader in the area of international education initiatives and has made international and technical education the focus of his tenure at the Department of Education. The German-American CEO Roundtable has recently focused on ways to improve the education and technical training of Georgia?s students. Elements of the ongoing discussions have included techniques and strategies to enhance cross-cultural understanding, economic development and workforce preparedness.

In December of 2011, representatives from the Georgia Department of Education, the Technical College System of Georgia, the University System of Georgia, and the private sector met with Ulrich Maly, the Mayor of Nuremberg, and officials from the German public and private sectors to discuss expanding educational partnerships between Georgia and Germany.

These meetings laid the groundwork to connect Georgia public school students with existing programs in Germany. Moving forward, the efforts will become a catalyst for economic growth as these programs will provide students with the cultural competence and communication skills necessary to become successful members of the future workforce.
German Ambassador Peter Ammon Discusses Education with State Leaders

Porsche General Counsel Joseph Folz welcomed and introduced Dr. Peter Ammon to many of Georgia?s top leaders during his recent visit to the state. The event provided an opportunity for candid conversation about expanding economic and educational ties between Georgia and Germany. Folz began the discussion by applauding State Superintendent of Schools, Dr. John Barge?s efforts: ?I would like to specifically commend Superintendent Barge for engaging with German companies to discuss ways we can better prepare our students for entering a global workforce.?

Dr. Barge shared with Ambassador Ammon insights into the state?s current focus on expanding Georgia?s international education opportunities with Germany ?due to both the strong history between our two nations as well as the significant German investment and partnerships with the German business community in our region.? Dr. Barge went on to discuss programs currently in place, including the expansion of German language education in Georgia?s classrooms and the high number of Georgia students earning a Deutsches Sprachdiplom, a certificate which recognizes a student?s German language proficiency and allows him or her to study at a German University free of charge.

This discussion was held over breakfast at the home of Wayne Reece. Among those in attendance were United States Senator Johnny Isakson, Consul General of the Federal Republic of Germany, Dr. Lutz G?rgens, Attorney General Sam Olens, Secretary of State Brian Kemp, State School Superintendent John Barge, Revenue Commissioner Doug MacGinnitie, University System of Georgia Chancellor Hank Huckaby, and other top representatives from state agencies, the General Assembly and the education community.

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