To revitalize rural Georgia, lawmakers are proposing public funding for high-speed internet service, changes in hospital regulations and permission for farms to sell wine directly to customers.
A new tax on streaming video, digital books and downloaded music would raise money for rural internet subsidies, according to recommendations approved unanimously by the House Rural Development Council on Thursday.
The 4 percent communications service tax would replace existing taxes charged for phone lines and cable TV while imposing new levies on digital goods that have so far avoided the government's grasp. A law approved earlier this year required online retailers who make at least $250,000 or 200 sales a year to collect state sales taxes on their products.
Legislators' initiatives also include allowing local electric membership corporations to offer internet service, raising the cap on Georgia's rural hospital tax credit from $60 million to $100 million, and expanding jobs tax credits.
The council’s ideas will result in nine to 12 bills that will be introduced in January for consideration by the Georgia General Assembly. The group of 26 rural representatives, now in its second year of work, is trying to bring back jobs to sparsely populated areas that have steadily declined for decades.
House Ways and Means Chairman Jay Powell said the legislation lays the groundwork for long-neglected areas to thrive.
“All of those proposals are important to job creation and economic development,” said Powell, a Republican from Camilla. “You can’t expect results overnight, and if it doesn’t happen right away, you can’t say it’s a failure. You have to give it time to develop.”
Most of the Rural Development Council’s suggestions focus on economic growth and health care. Its recommendations didn’t deal with agriculture and education.
Rural health care could receive intense scrutiny in the upcoming legislative session.
Currently, anyone who wants to open or expand a hospital or substantial medical provider has to get permission from the state, called a “certificate of need” or CON. The process is meant to prevent for-profit companies, such as Cancer Treatment Centers of America or sports medicine centers, from cherry-picking the most lucrative services away from hospitals and leaving them to provide money-losing services such as neonatal care.
The council recommended eliminating the CON in a 10-county Atlanta area so they wouldn’t have to get a license to build.
Outside that area, or within 20 miles of any existing hospital, there would be a “rigorous” process to apply for a license from the state. The report didn’t say what that meant.
Georgia Hospital Association Executive Vice President Ethan James said he understood that lawmakers felt it was time to act on the CON, and that the hospitals were working together on an alternative proposal.
“Our concern continues to be that specialty providers would be able to cherry-pick the best-insured and least-acute patients, leaving the uninsured and underinsured and medically complex for hospitals to treat,” James said. “I hope it doesn’t have to be a fight, but a collaboration.”
The General Assembly passed several bills focused on rural Georgia earlier this year. Those efforts set up micro-hospitals, an economic development research organization and an unfunded plan for rural broadband subsidies.
In the upcoming legislative session, the communications services tax could raise $150 million annually to fund expansion of internet services that are necessary for businesses, health care organizations and education, Powell said.
“The council’s recommendations will provide us with a solid framework as we begin to craft legislation for the 2019 legislative session,” said House Appropriations Chairman Terry England, a Republican from Auburn.
Proposals to ease rural woes
A look at the recommendations of the House Rural Development Council:
- A 4 percent communications services tax on cable TV revenue, landline phones, cellphones, broadband equipment, telecommunications services, broadcast satellite services, and digital goods and services. Existing sales taxes and franchise fees would be eliminated.
- Permission for farm wineries to sell up to 24,000 gallons of their own wine without having to go through a distributor, as is now required.
- Grants worth up to $5,000 for municipalities to clean up blighted areas.
- Job tax credits of $500 per employee in counties that join new regional development authorities.
- Approval for electric membership corporations and rural telephone companies to sell broadband services.
- State regulations for deployment of future 5G cellphone technology.
- Replacement of the state's certificate of need law with accreditation and licensing requirements for health providers outside a 10-county Atlanta area.
- Increase the rural hospital tax credit cap from $60 million to $100 million.
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