Rep. Turner Proposes Legislative Approval In Order To Accept Federal Funds

Representative Scot Turner of Holly Springs is upset.

One of his constituents called to complain that her unemployment insurance rates were going up, despite not having laid off any employees. After some investigation, the gentleman from the 21st discovered the cause: Georgia had borrowed money from the federal government to pay unemployment benefits, and was paying it back via increased employer contributions to the Federal unemployment tax.

Turner’s main complaint is that the General Assembly was not involved in the decision:

No one in the General Assembly was given an opportunity to debate whether that was an appropriate solution for our State. I think that lack of debate is wrong. I believe as the elected representatives of the people, the General Assembly should debate whether these programs and the strings attached to those federal dollars are right for Georgia.

There is no such thing as local control when spending Federal Dollars. Every dollar has a string attached that leads all the way back to Washington D.C. and must be spent exactly the way D.C. wants it to be. We must be leery of the strings attached to those dollars and do a better job of vetting Federal Programs in our state.

His response was to introduce House Bill 793, which would require entities of state and local government to get specific legislative approval in order to accept federal loans or grants.

Rep. Turner has a point. Congress does place all kinds of restrictions on the use of federal funds. Federal largesse is often used as a way to get states to implement policies they wouldn’t have otherwise enacted, were it not for the ‘free’ money. But, I wonder if there aren’t unintended consequences in H.B. 793.

For example, take an agenda item from the Gwinnett County Board of Commissioners meeting earlier this week:

2014-0043 Approval/authorization to accept and execute any necessary documents to effectuate a Federal Aviation Administration (FAA) Airport Improvement Program (AIP) grant and a Georgia Department of Transportation State Airport Improvement Grant in order to conduct an environmental assessment for the Taxiway Y extension and runway rehabilitation projects. The total project cost is $82,155.00 with the FAA providing $73,940.00, the State providing $4,108.00, and local County funds providing $4,107.00.

Since, under HB 793, no county “shall accept federal funds in any form or for any purpose, including, but not limited to, loans and grants, unless the acceptance of such federal funds has been expressly and specifically approved by an Act of the General Assembly,” (emphasis added) presumably the General Assembly would have to pass a bill before before Gwinnett’s Briscoe Field could be improved.

I’m sure Rep. Turner doesn’t want to spend the majority of the 40 day legislative session approving bills allowing cities and counties to accept federal funds for everything from road improvements to public safety grants. And I’m equally sure mayors and county commissioners aren’t looking forward to petitioning the state in order to get funds for needed local projects.

Back to the Representative’s original complaint. The state borrowed money from the feds to pay claims for unemployment during the recession after the state’s unemployment fund ran out. That money was temporarily interest free via a provision of the 2009 stimulus. The General Assembly knew this, and could have made changes to the unemployment insurance program or allocated general fund money in order to repay the loan. They did not, but at least they had the opportunity to get involved.


  1. CJBear71 says:

    There is a process for the State to have comments and concerns addressed on local government grant applications. It’s called the “State Clearinghouse” under the Governor’s Office of Planning and Budget, and it is governed by a Presidential Executive Order from 1982. Almost no one was using it, and the office didn’t want to review much anyways (I think some stimulus funds were reviewed, but not much otherwise), probably for the exact unintended consequences you’ve talked about. The office was suspended in August 2012.

    So if you really do think the State should have notice and comment on local grant applications, fire up that office again. You don’t need some special bill.

  2. SmyrnaModerate says:

    Also, the legislature specifically voted to increase employer payments to repay the loan. So while the legislature may not have been the ones to decide to take the loan they most certainly decided how it would be repaid. HB 347 passed the legislature in 2012 and increased the employer contribution while reducing the amount of weekly benefits to the unemployed in order to repay the loan. Though this was before rep turners time in the legislature.

    you are talking about thousands of loans and grants a year. It’s probably tens of thousands…

  3. This is a great example of how a “common sense idea” quickly breaks down when it interfaces with reality. I believe the full story is that during the good times, they cut unemployment insurance taxes for employers and let the state’s reserves get too low. I’m sure the employer in question didn’t have a problem with it then. Hopefully she invested the savings back then – should be more than enough to cover repayments on an interest free loan.

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