Capitol Recap: Georgia’s film tax credit faces sharp focus from legislative panel

Dorfman said state incentives can be useful when trying to develop a new industry, such as the billions that Georgia has awarded to auto companies to build electric vehicles here.

It makes less sense, he said, to pour that kind of cash intoo “mature industries” — film and television production included — and the state “should be looking to shrink or end those credits.”

Film buffs disagree.

They say the tax break has turned in a great performance in a supporting role, helping to drive $4.4 billion in direct spending in the state last year.

Andrew Capezzuto, the chief administrative officer and general counsel for the Georgia Department of Economic Development, made a selling point by telling the panel there have been nearly 1,000 film productions outside of metro Atlanta.

Capezzuto knows his audience: Almost all the leaders in the General Assembly’s Republican majority come from outside metro Atlanta.

The film credit is only part of a larger system of billions of dollars in tax incentives that will draw the interest of the panel before it is expected to make recommendations for consideration during the 2024 legislative session that begins in January.

But it’s a big one and one that Senate Finance Chairman Chuck Hufstetler, a co-chair of the study panel, has focused on in the past. He proposed capping the credit at $900 million a year, although Senate leaders backed away from that move after it cleared Hufstetler’s committee near the end of the 2022 session.

Tax breaks often win passage in the Legislature after supporters provide testimony or data from industry lobbyists or other parties that would benefit from them. Typically, to clinch the sale, backers tell lawmakers that the tax breaks will create jobs.

Whether that really happens was the subject of audit reviews that came out late last year. The reviews found that in some cases, most of the jobs credited to state tax breaks would have been created without them.

There’s no way to tell how this story will play out before the final credits roll.

In 2012, when lawmakers last studied the state’s tax system, they wound up making changes favored by industry lobbyists and creating new tax breaks.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Trump plan to end EV tax credits seen as threat to Georgia’s booming industry

Georgia is reaping rewards for the energy it put into landing two major factories — and more than 15,000 jobs — to manufacture electric vehicles.

But what if Donald Trump returns to the White House and fulfills a campaign promise he made earlier this month in Columbus to pull the plug on federal tax credits and domestic manufacturing incentives for EVs at the center of President Joe Biden’s signature climate and health law?

“Anything which would discourage more EV development would not be economically good for Georgia,” University of Georgia political science professor Charles Bullock told The Atlanta Journal-Constitution.

Georgia secured two EV assembly plants before the Biden administration’s climate law took effect. The first was a $5 billion factory that Rivian plans to build an hour east of Atlanta and employ 7,500 people. Hyundai Motor Group then announced that it would locate a $5.54 billion EV and battery plant, plus 8,100 jobs, near Savannah.

Both cost Georgia big money through incentive packages —$1.8 billion to Hyundai, $1.5 billion for Rivian — but they helped make the state a power player in electric-vehicle circles. Since 2020, EV makers and their suppliers have announced more than 40 projects totaling more than 28,400 jobs and $22.7 billion in anticipated investment in the state, according to Gov. Brian Kemp’s office.

Kemp likes to tout Georgia as “the e-mobility capital of the nation.”

But, like many Republicans, he isn’t a fan of the Biden climate law that Democrats pushed through Congress without any GOP votes.

A key component of the law, meant to propel U.S. manufacturing, ended federal tax credits of as much as $7,500 for the purchase of EVs if they were assembled overseas unless their manufacturing moved to the U.S.

Kemp says the new law punishes companies such as Hyundai that made new investments but were still building factories.

“We either need to do one of two things: You need to give (tax credits) to everybody or take them away, just make the playing field completely level,” Kemp said.

The White House has cheered Georgia’s successes in green energy under Biden’s watch. Analysis by the administration points to an estimated $32 billion in new investments, including $22 billion in EV and battery production and $10 billion for clean energy manufacturing facilities. That’s among the most of any state in the country.

That’s why Georgia U.S. Sen. Jon Ossoff said it would be a mistake to halt federal EV incentives if Republicans retake the White House and Senate.

“It’s disappointing President Trump is joining Gov. Kemp and Georgia’s GOP House members in supporting the repeal of manufacturing incentives that are benefiting Georgia more than just about any state in the nation,” an Ossoff spokesperson said.

Kemp heads overseas again, with the nation of Georgia, France on his itinerary

Gov. Brian Kemp broke out his passport again this past week, taking a trip to the nation of Georgia.

From there, he was set to go to the Paris Air Show, which begins Monday, to promote the state’s large aviation industry.

It’s the governor’s third trip overseas since winning reelection in November.

In January, Kemp traveled to Davos, Switzerland, to participate in its elite economic forum. The governor recently returned after leading a trade mission to Israel.

On the schedule for Kemp’s latest trip: a meeting with Georgian Prime Minister Irakli Garibashvili and other leaders in the capital city of Tbilisi. The itinerary also called for a visit with National Guardsmen from back home who are stationed in the former Soviet republic, plus a meeting with members of the Marietta Fire Department who are conducting training there.

Kemp said in advance of the trip to Georgia that one of its purposes was to “reinforce our commitment to our partnership with their military.”

“That partnership has endured for over 28 years, as we remain a friend and ally to freedom-loving people around the world,” Kemp said, adding that he’ll also promote the state to “job creators and major industry leaders we’ll meet during this busy trip.”

Russia invaded its neighbor to the south in 2008 and possesses military control of roughly one-fifth of Georgia. But support for the U.S. is widespread in Tbilisi and much of the southern and eastern parts of the country, and the Georgian constitution makes clear the country wants to join NATO.

At the Paris Air Show, Kemp will promote Georgia’s aviation industry, which includes more than 800 aerospace companies, according to the state Department of Economic Development. More than 200,000 people in the state work in aerospace-related jobs, according to state figures, and aerospace products are Georgia’s No. 1 export.

Pat Wilson, the state’s top economic development official, said the mission will help bolster Georgia’s role as a logistics hub.

“Connectivity leads to business, and it starts with building relationships,” Wilson said. “Missions reinforce these relationships and create new ones, opening the door for new opportunities.”

Work begins slowly to trim Medicaid rolls following pandemic

More than 1,500 people lost their Medicaid health coverage after Georgia began its first review of eligibility requirements for the program’s 2.8 million beneficiaries since the start of the coronavirus pandemic.

The state has a long way to go before it completes the review.

It started small, looking at a batch of 12,526 enrollees to ensure they still qualify for the federal-state health insurance program for poor children, some poor adults who are disabled, new mothers and the elderly.

The state has added nearly 700,000 people to its Medicaid rolls since March 2020, during a period when annual requalifying requirements were suspended in the midst of the pandemic emergency. Georgia and other states are now asking all beneficiaries to reapply, and they are reviewing cases to determine who no longer qualifies.

Most in the first batch who were stripped of their benefits had not responded to the state’s letters, emails and phone calls.

Medicaid officials are concerned some recipients may have moved and do not know they need to reapply. Health care advocates fear the state lost paperwork that beneficiaries actually sent in, or that the program is failing to assist people who need help completing the paperwork.

About 6,000 were automatically reenrolled by computers that searched state databases and other sources to verify they are still eligible. Some who lose coverage will be referred to the Affordable Care Act marketplace to buy insurance.

As the review continues, it could be a slow march.

More than one-third of that first batch of 12,000 cases were still incomplete this past week. It’s a personnel issue.

A spokeswoman for the state Department of Human Services said 100 of the 550 new caseworker positions dedicated to the review remain open. The department is still accepting applicants.

The state hopes to set a quicker pace. Each monthly batch is expected to expand to more than 200,000 cases.

The goal is to complete the review of all Medicaid recipients within a year.

Credit: TNS

Credit: TNS

Clyde gun bill passes as votes resume in U.S. House following standoff

U.S. Rep. Andrew Clyde got his vote — and succeeded — as Republican hard-liners allowed a series of GOP-backed measures to go to the House floor.

It ended, at least for now, a revolt against House Speaker Kevin McCarthy involving the debt-ceiling agreement he made with President Joe Biden that won approval earlier this month.

The hard-liners blocked legislation for nearly a week before yielding to allow votes on Clyde’s bill and several others.

Clyde’s bill — which would prevent the federal government from requiring the registration of pistol braces, devices that allow the handguns to be fired like rifles — passed on a 219-210 vote.

Clyde, a gun store owner, had a part in the hard-liner revolt, which began after he reported receiving threats that his gun bill wouldn’t make it to the floor because of his opposition to the Biden-McCarty deal on the debt ceiling. He later said he received assurances the measure would receive a vote this past week, and he did not vote with other hard-liners to block floor action on other legislation.

The Athens Republican said he was happy GOP colleagues were back at work in the House passing conservative legislation.

“I would say that things are moving forward in a very positive direction,” he said.

He also hinted at what could be the next fight: funding the federal government for the fiscal year that begins in October.

Clyde, a member of the House Appropriations Committee, and other conservatives want to roll back federal spending to 2022 levels, including rescinding any spending that was authorized in future years.

“Those are things that have to be worked out,” he said, “and we’re working them out.”

Political expedience