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Analysis: Ga. budget deal, tax brought back from dead

ATLANTA — Last Tuesday, the Georgia House of Representatives and Senate disagreed about the simplest thing: the days they would meet.

The speaker of the House and governor were aligned against the lieutenant governor and the Senate about a new tax bill, leaving a major part of the budget in doubt.

Macon and Bibb County’s plan to help the sports and music halls of fame with a local penny tax hung by a thread. Its best hope was a difficult fight in the House, where legislators had already shown disdain for the Macon museums by stripping them of state dollars.

But by Wednesday evening, the Legislature had an April 29 end date, a tax deal and — seemingly — a 2011 budget agreement on all but the smaller details.

Then Macon’s penny tax on hotel-motel stays breezed through the House, shortly after 7 p.m.

It was as if, after three months, the legislature had solved all its problems on a Wednesday afternoon, But it was a little more complicated than that.

The budget deal

Much of the Legislature’s late-found speed-up stems from the state constitution. The assembly can meet only 40 days a year, spread out on the calendar by a series of majority votes.

Some degree of brinkmanship is expected until that end date approaches. But because of the poor economic situation the state has been through and its effect on tax revenues, the House and Senate took the unusual step this year of holding joint budget meetings.

Leadership from both wants to make it clear: They were working well together. They’ve said it so much you’d think that was unusual in the Georgia General Assembly.

And so it was that the key to next year’s budget did not come out of left field on Wednesday afternoon, as it seemed to the public. It grew out of meetings between Gov. Sonny Perdue, Lt. Gov. Casey Cagle and Speaker of the House David Ralston. It had roots in Gov. Sonny Perdue’s 2006 re-election campaign, when he called for an end to the state tax on retirement income. That was pasted into a fee bill, added together with a hospital tax, merged with yet another small tax cut, and then it was a done deal.

After the vote, Ralston said he couldn’t put a hard timeline on discussions among the top three Republicans, other than the last “week or two.” Nor did he say whose idea it was to merge all these cuts and increases.

Cagle said an agreement between the top three and their leadership teams came “earlier in the week” last week. Democrats were kept out of the loop, as was the media. Rank-and-file House Republicans were told of the plan Wednesday morning.

Cagle’s caucus in the Senate was “obviously extremely excited” about the deal, the lieutenant governor said. They’d tried already to link the hospital tax with a future tax cut on health insurance premiums. That, House members said, offered no guarantees for the public beyond tax cuts for insurance companies, who might or might not lower their rates.

Publicly, Ralston drew a line in the sand. But behind closed doors the new deal took shape. Then it flew through the House and Senate, where Republicans could point to the tax cuts, which start in 2012, and hope conservative voters forgive the more immediate tax increase.

Democrats, who had locked down in the Senate against the hospital tax, forcing the Republican majority to pass it on their own, were beaten on an end-around. They were left to complain about the delayed nature of the cuts, and the apparent about-face from the speaker on whether it was constitutional to paste all these disparate bills together.

“I think we just passed an illegal budget,” House Minority Leader DuBose Porter said after the vote.

“I think the real story line here is that the speaker, the governor and myself have been working together very, very well this session,” Cagle said.

Said the speaker: “I’m very pleased with the way that we have responded in the General Assembly this session to an unprecedented economic downturn.”

The hotel-motel tax

State Rep. Allen Peake, R-Macon, is an optimist, so much that he thinks a Macon-Bibb consolidation plan is going to pass this year.

And even he thought the hotel-motel tax was dead this year.

The extra penny would raise an estimated $400,000 a year, split three ways between the sports and music halls of fame and the Douglass Theatre in downtown Macon.

The proposal had been blocked by a number of forces. The state’s convention and visitors bureaus were against it, seeking to protect new hotel-motel money for themselves. The state’s hotel industry joined them. This was an opening for Atlanta legislators, or at least those who want the halls moved there.

And so the hotel-motel proposal sat and sat and sat without coming to the House floor for a vote. It missed a key deadline. It was declared dead.

And then it was revived. State Sen. Cecil Staton, R-Macon, got it tacked onto another hotel-motel bill, one that would allow Atlanta to extend its hotel tax to build a new NFL football stadium or renovate the current Georgia Dome. His amendment narrowly cleared the state Senate, with Atlanta legislators voting against it.

But Staton had enough Republican support.

And state Sen. Robert Brown, the Democratic minority leader, garnered enough Democrats to win by a couple of votes.

Atlanta and Macon were suddenly partners, or enemies, tied together by millions in potential pennies.

State Rep. Mark Burkhalter, R-Johns Creek, a metro Atlanta legislator and a major player in the Legislature before Glenn Richardson resigned his speakership in a scandal earlier this year, was furious. The Georgia Dome bill was his baby, and now it had an unwanted, and potentially unpopular, rider.

He planned to fight it.

But state Rep. Allen Peake, R-Macon, is secretary of the House Republican caucus. He has an engaging and friendly style, and he often engages people with talk about his favorite legislation. He mentions that they ought to eat at one of his Cheddar’s restaurants around the state.

It was Peake who surprised many by getting a seemingly unpopular ban on texting while driving through the House earlier this session. He went to work on Burkhalter and the Republican caucus. State Reps. David Lucas, D-Macon, Nikki Randall, D-Macon and Bubber Epps, D-Dry Branch, worked their fellow Democrats, and Lucas is one of two longest-serving House members. Nearly all that caucus was locked up.

State Rep. Jim Cole is from Forsyth, but he represents a tiny, unpopulated sliver of Macon. And he’s Gov. Sonny Perdue’s floor leader, adding weight to his words. House Minority Leader Porter is from Dublin, but had vocally supported Macon’s hotel-motel tax all session long.

“If we had all the Democrats, we had (about) 70 votes,” Peake said. “So I needed 20. ... And I knew I was gonna get a bunch of rural guys, who saw it as a rural-versus-Atlanta fight. Jim Cole was working his magic with the governor, and my job was to get Burkhalter.”

What would have happened if this fight — Burkhalter and metro Atlanta versus Middle Georgia — had hit the floor?

Nobody knows. Burkhalter changed his mind after talking to Peake and other Macon legislators. He also sought assurances that Macon’s amendment wouldn’t harm his underlying bill or change hotel-motel tax rules statewide.

“I walked away convinced that what they’re doing is a laudable effort ... and I decided I wouldn’t try to stand in the way,” Burkhalter said later.

It’s also possible that Burkhalter saw the handwriting on the wall: Middle Georgia had the votes.

Democrats indeed supported the merged bill, with only state Reps. Sistie Hudson, of Sparta, and Kevin Levitas, of Atlanta, voting against it. Levitas took the well against Macon having the halls, as he has often, and advocated moving them or shutting them down.

“They asked for state money, they got state money,” Levitas said of Macon. “And they’ve done nothing since then to put their private money into the project.”

But that thinking did not take hold Wednesday. The hotel-motel tax passed quickly, coming on the heels of the blockbuster budget deal. Gov. Perdue is expected to sign it into law, ending a two-year effort to pass what seemed like a simple little bill.

Now local legislators will turn their attention back to the budget and try to undo the House’s work there.

The two halls would get no state dollars as it stands now.

They’re optimistic about their chances, thinking the money can be slipped back in over at the Senate.

Or perhaps not.

There are 236 seats in the Georgia House an Senate. Predicting what all those people will do when everybody’s pulling on them is difficult.

To contact writer Travis Fain, call 361-2702.

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