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Editorial & Opinion

Jan 16 - GUEST EDITORIAL: “The Hidden Cost of Georgia’s Sales Tax on Energy Used in Manufacturing

NEWS - Editorial & Opinion

By Chuck Eaton

Jan 16, 2012 - Georgians have made it clear that attracting and retaining jobs should be the No. 1 priority of every elected official. Removing this tax as an impediment to job growth and creation is a great first step.

Late last fall, my colleagues on the Georgia Public Service Commission and I sent a letter asking the Georgia General Assembly to consider removing the sales tax manufacturers pay on energy, including electricity, used in the manufacturing process. Governor Nathan Deal supports this idea, as do Lt. Gov. Casey Cagle and Speaker David Ralston.

Manufacturing is of major significance to the economy of Georgia, employing hundreds of thousands of skilled workers. Georgia, like virtually every other state, does not tax raw materials used in manufacturing. Instead, one sales tax is applied to the finished product to avoid a pyramiding scenario where sales tax is paid on top of embedded sales tax. Georgia is one of only ten states, and the only state in the Southeast, to charge full sales tax on energy.

This places Georgia at a competitive disadvantage when it comes to attracting new jobs and investment. The hidden cost of Georgia’s tax on energy also puts existing manufacturing jobs at risk by increasing production costs.

Before I was elected to the Public Service Commission, I worked in LaGrange as a manufacturing representative. I traveled the Southeast, calling on companies while selling our products. You could say I was on the frontline of the free market. In preparing proposals, I noticed that even within our own company, different plants could produce the same product for different costs. This not only impacted whether our company got certain contracts, but dictated where the actual manufacturing took place when we won an order. Higher-cost plants would inevitably lose out to lower-cost producers.

Georgia-based manufacturing plants face external and internal competition. Many corporations look at various facility costs daily, shifting business to a different state’s facility just as quickly. Less business means reduced payroll hours and smaller paychecks for the remaining employees. While plant closings garner much media attention, the lead-up to the closing can be more painful and less publicized, as business is shifted away and jobs are slowly cut.

A large industrial plant’s electrical cost can rival payroll as its biggest expense, so the competitive effect of the sales tax is significant. While Georgia’s electric rates are competitive with other states, the added sales tax can change that dynamic.

The Albany City Commission and the Dougherty County Commission have stated that repeal of this tax is their highest priority because of its impact on local jobs. Proctor & Gamble’s paper plant is one of Albany’s largest employers and is Georgia’s second largest consumer of electricity. With energy being one of the largest expenses at the Albany plant, and with their constant pressure to lower expenses, failing to eliminate the energy sales tax could easily cost Georgia more in lost jobs and investment than it produces in state income.

In Dalton, the sluggish economy and the moribund housing market have combined to pummel the carpet industry, one of Georgia’s traditional manufacturing powerhouses. Several plants have been closed, costing the area several thousand jobs.

As I travel the state and speak with manufacturers about how to help them grow their businesses and create and retain jobs, managers constantly mention our energy sales tax as a cost that makes them less competitive. The cost of energy, especially in manufacturing processes that require massive amounts, is a major factor as to whether Georgia retains our manufacturing plants.

We cannot continue to put good manufacturing jobs at risk over an outdated tax policy. Repealing the sales tax on energy used by manufacturers should be at the top of any list of economic growth and job creation measures considered by the General Assembly.

Editor’s Note: Chuck Eaton,Georgia Public Service Commissioner for District 3.

 

ENDORSEMENT: Jeff Felser is the Best Candidate for Savannah Mayor for the Business Community

NEWS - Editorial & Opinion

ENDORSEMENT: Jeff Felser is the Best Candidate for Savannah Mayor for the Business Community

The Savannah Business Journal and Coastal Empire News endorses Jeffrey A. Felser for Mayor of Savannah in next Tuesday’s mayoral run-off election.

The challenging economy in Georgia and Savannah demands that our City government be open to change; that we have youthful leadership that is willing to adapt and innovate; and that the City leadership is open and engaging of new ideas.

Jeff Felser has a proven track record of questioning old processes and practices in Savannah and Chatham County, and a record of having an objective set of eyes on our behalf.

His opponent Edna Jackson is unquestionably one of the nicest people you will ever meet, an even-tempered professional who represents our City well at public functions, both locally and around the country. We owe her a debt of gratitude for her 12 years of service on the City Council, especially during the period of Mayor Johnston’s illness several years ago, and we hope she will continue to pursue opportunities to serve.

But, the challenges ahead require enlightened business practices, demand the willingness to have an open government, and call for someone who will challenge the status quo - be willing to say ‘WHY are we doing this?’

For the past eight years, time and again, the only two Alderman who have repeatedly raised their hands and asked the difficult questions of former City Manager Michael Brown, and of Mayor Otis Johnson and Mayor Pro Tem Edna Jackson, were Alderman Tony Thomas and Jeff Felser.

For years, these two elected officials have been willing to talk to the media, bringing us information on issues that they questioned, and about which they could not get answers.

Thomas’ strength in this regard was acknowledged and rewarded when no one ran against him in the Nov. 6 General Election, and he was the highest vote getter that day. He appears to be the leading candidate on the Council for Mayor Pro Tem. It’s time now to put Jeff Felser in leadership, as well.

For years, the Savannah City Council has violated the Open Meeting Law, has kept a City Attorney in place who was ineffective, and has failed to make the tough decisions to trim costs and facilitate business growth. 

City Attorney Jimmy Blackburn’s son has been the Treasurer of Ms. Jackson’s election committees for years, including in her current bid for Mayor. It is that type of ‘insider’ situation that causes concern, and discomfort.

And while Savannah has what is termed a ‘strong City Manager form of government,’ the Mayor is the person that leads the City Council, is in charge of 'the message' to the staff from the public, makes sure that the voice of all Council members is heard...and tells the public the truth.

We cannot skirt over our problems of crime, poverty and a 60% dropout rate in our public schools. We have to be bold and creative. And as voters, we have to ask ourselves, ‘who will most likely bring about that change?’

Ms. Jackson would certainly work amicably with all parties to smooth the water, and attempt to ‘work things out.’ But we believe Jeff Felser is the candidate most willing to bring today’s problems and potential solutions to the public’s attention, and to the attention of the City Council on a day-to-day basis.

This week's City Council budget workshop was another case in point, once again, where Jeff Felser asked the most salient business question in the room. City Manager Rochelle Small-Toney and staff made presentations on key expense and revenue components in her proposed 2012 operating budget, including personnel. The City currently has 2, 551 FTE positions, a combination of full and part time employees.

They reviewed the City’s current strong financial position, it’s fully funded pension plan, and its strong bond rating. Small-Toney recommended that the Council put the $4.7 million in extra revenue that she projects they City will have left over at the end of 2011 into savings – versus spending it or using it to cut property taxes.

We also learned that the City has 241 open positions, about 9% of the total approved and budgeted workforce. A portion of those – about 76 jobs – are in the police and fire departments. But the rest of the positions are dark, and the open position levels have actually been much higher during the year, at times.

The 2012 budget fully funds all positions except for about 2.7% of total payroll for empty positions next year.

Felser asked the important business question. “If the City is running so well, even with our 241 unfilled, open positions – almost 10 percent of the workforce – why aren’t we being asked to cut the number of City employees, and cut the budget, and the tax burden of local residents?” Everyone just turned and looked at him, in silence.

There isn’t a company in this county that hasn’t cut its workforce - either because their revenues have declined - or because of the improved efficiencies of their operation through computerization and technology. Why hasn’t the City cut its workforce in a meaningful way, as well?

And, who will ask that question, and others like it, such as why our Police Department employees are working in antiquated, unhealthy buildings? Chief Lovett told us today that he is not aware of any meaningful amount in next year's Capital budget for his department. Felser has repeatedly questioned the City Manager on this issue.

He recently received the endorsement of the Georgia Board of Realtors PAC on behalf of Realtors in our area, people who want to see home prices stabilize and construction take off again.

Will things always be pleasant under Mayor Felser? No.

But will old practices and methodologies be challenged, will there be more open government, and will some people be replaced who need to pursue other careers or retire? Yes.

Jeff Felser is the right choice for Savannah, and for our business community.

Louise D. Phelps, Publisher

Coastal Empire News

 

   

Nov 28 – LETTER TO THE EDITOR: MPC Head Challenges Premise of Editorial by SMN

NEWS - Editorial & Opinion

Nov 28, 2011 – LETTER TO THE EDITOR:  MPC Head Challenges Premise of Editorial by SMN

 

By Thomas L “Tom” Thomson, Executive Director

Metropolitan Planning

 

To the Editor:

 

Did the Democrat Chatham County Commissioners play political hardball with the redistricting maps, undermining the political bases of two of its Republican members as expressed in an opinion in a November 17 Savannah Morning News (SMN) editorial “Too clever by half?” 

 

It is clear from reviewing the census information that the SMN premise is flawed.  The Metropolitan Planning Commission (MPC) staff, as the process technicians, can attest that the Democrat members of the Commission did not influence the lines to favor them.

 

Unlike the political analyst who uses partisan voting information to evaluate the voting districts from a political outcome perspective, the MPC staff, working with the County Commissioners and School Board members, used only census population statistics broken down by “white” and ‘non-white” parameters.  High population growth and a more diverse West Chatham County population alone explain the outcome. 

 

First, the MPC’s role in this effort was to analyze the changes in Census data and to draft new district lines according to the legal requirements (rules), which are to (1) balance the district populations, and (2) maintain the majority minority districts (Districts 2, 3, 5 and 8). 

 

Second, the order of events in the process began with MPC staff drafting maps for the members to review.  Meetings were then held individually, in pairs and in joint meetings of the two bodies with discussions about balancing the district population numbers to meet the rules.  No partisan conversations took place between staff and members of the two boards. No Republican, Democrat nor anyone else attempted to sway MPC staff to slant the new district lines in favor of Republicans or Democrats.

 

Third, the premise of the SMN editorial is not only refuted by the process outlined above, but by the fact that the main driver in this process was that most of the population growth over the last 10 years occurred in the West Chatham County commission districts.  Furthermore, and most importantly, the makeup of those moving to that area was much more diverse.  In other words, as a result of the shifting populations, the western areas added many more non-white residents. 

 

In 2000, 76.8% of District 7 residents were white.  Over the 10-year period in the same District 7 area, the white population shrunk to 61.5%, which is the same percentage of white residents that are in the proposed new district.  A similar pattern happened in District 6.  In 2000, 66.8% of District 6 residents were white, now it’s 55.4%.  The proposed map shows a white population of 61.7% -- a big drop from 2000 but higher than the current population mix in the current district.  This clearly demonstrates that the increase in diversity changed the proportion of white and non-white residents in these districts, not “hardball politics.” 

 

 

   

COMMENTARY: Increased Workload, Decreasing Staff Could Impact Environmental Health Programs in Coastal Georgia

NEWS - Editorial & Opinion

SBJ Special Contribution by Kirk McAlpin,

Public Health News Bureau

 

Nov 21, 2011 - Lauren Baker walks into a restaurant prepared for potential code violations. As cooks shuffle around stoves and trays of food, she washes her hands, puts on gloves and a hair net, takes out her checklist and begins going through the kitchen poking food with a digital thermometer, looking for improper food handling and items stored out of place.

 

Baker is an environmental health specialist in Chatham County, one of eight counties in Georgia’s Coastal Health District. The job has become increasingly demanding as the workload rises while staff is in decline due to a tight budget and recruitment difficulties.

 

“There are not enough hours in the day nor are there enough people,” said Baker.

 

Most inspectors must do five inspections each working day to keep up, said Todd Jones, Chatham County’s environmental health director.  This is usually possible in the Savannah area. “But in a rural area with 30 minutes between towns, you may only do one to three inspections per day,” Jones said.

 

Part of the job of an environmental health specialist is to educate business owners on how to keep their establishments up to code, which takes more time – a luxury specialists don’t have.  “We lose the educational piece. We don’t want it to be about just getting your numbers in, but that’s what we’ve had to do,” said Jones.

 

While environmental health specialists work largely out of public view, they take on the responsibility of preventing health hazards that encompass everything from bed bugs to water quality. Environmental health is currently struggling to keep up with state and local mandated regulations because of financial and workforce problems.

 

“We don’t have the resources and we are in a field that is highly under-recognized,” said Baker. “There are people that work within other departments of the health department that have no idea what we do, which is really frustrating.”

 

Environmental health expands role at county level

 

In Savannah alone, there are between 1240 and 1290 restaurants depending on openings and closings, with only nine environmental health staff conducting inspections. The state mandates that each restaurant be inspected twice a year, though the local county health board in Chatham requires quarterly inspections.

 

There are also between 200 and 215 tourist accommodations that must be inspected twice a year. Other state-mandated programs include on-site sewer and septic monitoring, public swimming pool inspections and rabies monitoring.

 

But that’s not all they do. In addition to the state mandated programs, environmental health specialists in the Coastal health district are responsible for a wide range of duties: mosquito control, bedbug monitoring, inspections of tattoo parlors and tanning salons, garbage ordinance, childhood lead prevention programs, inspections of beach waters for dangerous bacteria, indoor air quality inspections and a new role in emergency support functions as part of the National Response Framework (NRF) for disasters.

 

“The reason that environmental health gets called on for a lot of stuff is that we’re one of the few agencies in the state that has someone placed in each county,” said Todd Driver, district environmental health director for the Coastal health district.

 

If emergency shelters are established under any circumstance – hurricanes, tornadoes, floods or fires – environmental health staff will be involved to assure the safety of food and the water supply in the shelters. In an emergency situation, environmental health would also evacuate the special needs population of the district.

 

“While the responses are intermittent, the training is not intermittent,” said Doug Skelton, M.D., director of the Coastal health district. “There have been a lot of training activities that involve our people.”

 

“For the environmental health worker, that’s another thing that takes up a lot of their time on a day to day basis, especially for the managers but also the people below them that work in the field,” said Driver. If environmental health is involved in a disaster, other mandated programs could fall to the wayside for an indefinite period of time.

 

Doing More With Less

 

Full-time environmental health positions in Georgia went down from 447 to 398 between 2010 and 2011. There are currently five vacant positions in the Savannah office of the Coastal health district alone.

 

When environmental health workers are not replaced, other staff has to take on those duties. “When that work is absorbed by another staff member, the quality of work goes down because the staff is under so much pressure to get the state-mandated jobs done,” said Driver. “It affects public health at that point.”

 

In the last year on a state level there was a 40 percent turnover rate in the environmental health profession, said Jones. He expects in the state office alone - this year and in the next two years - that five out of 10 employees are going to retire. Those positions may not be filled due to both finances and lack of qualified applicants.

 

“At this point, we’ve been able to sustain ourselves by doing more with less,” said Jones. "We’ve been depleted to little more than mandated services.  No longer are some counties and districts able to assist homeowners with well testing, septic evaluation, food service training, insect/vector control, and general public health education.  Environmental health specialists are now simply restaurant, motel, pool and septic inspectors that collect revenues for these limited services.  In other areas of the state, programs such as West Nile surveillance, injury prevention, radon or mold/IAQ can no longer be performed.”

 

Although additional environmental specialists are needed to fill gaps in the workforce, the combination of low pay and the need for a high level of education make it difficult to find the right person for the job.

 

“The education level of the staff members here has to be extremely robust,” said Jones. “It’s really tough to recruit a college educated, four-year science degree graduate to come into public health at basically $26,000 a year,” he said. Entry-level salaries have stayed the same since around 2003.

 

Environmental health inspectors have to be proficient not only in science, but also general engineering practices for pool safety and proper septic tank and well construction. They also inspect community gardens for dangerous lead levels and enforce new no-smoking laws.

 

The high turnover rate is not surprising. Promotions for workers like Lauren Baker have been delayed because of the strapped budget. Environmental health specialists in the Georgia Coastal health district are paid less than their counterparts in other states as well as other agencies in Georgia, such as the Environmental Protection Agency (EPA) and the Department of Natural Resources (DNR), who are one pay grade higher despite working with similar environmental compliance issues.

 

It also takes a lot of money and time to get a new environmental health employee ready to go out in the field on his own. On-the-job training for one environmental health specialist costs between $44,000 and $46,000 over three years, according to Jones. Some employees use the training as a stepping-stone and move on to higher paying jobs.

 

“We are marginally adequate with very dedicated environmental health professionals,” said Skelton. “There are more things that we could do, and things that we are doing now that we could do better with a few more staff.”

 

Regulation and Education

 

When it comes to code enforcement, Lauren Baker said, “Nothing really surprises me anymore.” She’s seen road kill being butchered in kitchens, cigarettes burning on counters and dishwashers and walk-in coolers that didn’t work – all violations that are potentially dangerous to consumers. Other staff occasionally run into angry managers, raw sewage being piped into ditches and even crystal meth labs in motels.

 

Environmental health inspectors have to make restaurant managers and workers throw out large batches of food that violate inspection ordinances. With bed bug infestations, an entire floor of a hotel or motel can be shut down.

 

“No inspector’s goal is to make you clear out all of your product. If it can be saved, I’ll work to save it, because that’s a lot of money,” said Baker. “If it’s ultimately between your dollar and the public’s health, I’m going to choose the public’s health and err on the side of caution,” said Baker.

 

“A lot of restaurant managers think we are the bad guy,” said Trista Best, another environmental health specialist in Savannah. “Really we want to work for them, too, because if they make someone sick they could lose their business.”

 

Environmental health workers are as much educators as they are regulators when it comes to protecting public health. “My philosophy has always been 50 percent education and 50 percent regulation,” said Jones. “We do have mandated things that are black and white, but you are not doing your job as an environmental health specialist if you are not giving them the ‘why’ behind the regulation.”

 

Importance of Prevention

 

Defunding environmental health or leaving vacant positions unfilled could cost the public. “With each level of removal from public oversight comes a higher level of risk. Our rate of food borne illness in Savannah is extremely low, and I attribute that to the regulatory and educational practices that we employ,” said Jones.

 

“Environmental health in itself is prevention. To quantify or place a metric on prevention is virtually impossible,” he said.

 

On the coast, where restaurants, beaches and hotels are vital to the tourist industry, maintaining a clean reputation is important. “Environmental health is a critical part of the infrastructure for economic development in this area,” said Skelton.

 

Jones compared environmental health to other preventions like vaccines and seat belts that the public is now accustomed to. If those prevention measures disappeared, the public would likely see a rise in health hazards.

 

“It would be safe to say that there would be an increase in illness if we weren’t completely around,” said Driver.

 

 

 

   

NEWS ANALSIS: Governor Deal, Senators Chambliss and Isakson Issue Pledge to Support Charleston Harbor Deepening

NEWS - Editorial & Opinion

By Lou Phelps, SBJ Publisher

Nov 16, 2011 – As the smoke clears after Transportation Secretary LaHood’s visit to Savannah Tuesday, it appears that a number of things got worked out – politically – when it comes to garnering federal and Obama Administration support for the deepening for the Savannah River project.

This morning, Georgia Gov. Nathan Deal and U.S. Senators Saxby Chambliss and Johnny Isakson issued a joint statement, pledging to support efforts to deepen not only the Port of Savannah but also the Port of Charleston, and to work closely with the state of South Carolina on regional economic development.

As reported, LaHood surprised all in his entourage yesterday as he visited Savannah, by making the public statement that said, in effect, the “Port of Savannah must be deepened.”  It was far more than Georgia Ports Authority or Georgia's top officials had hoped to have happen during the visit. according to those in the group. 

Appartently, LaHood delivered a message, and talked with Georgia’s top political leaders ... encouraging them to agree to work in support of South Carolina’s statement goals for its Charleston port – versus trying to compete with them for finite federal dollars. 

“Georgia has fought long and hard to deepen the Port of Savannah, and we’re experiencing great progress on that front,” Deal said today.  “We see the Port of Savannah deepening as a boon to the economy of the Southeast, not just Georgia. This is a regional effort; that’s why we give our support to deepening the Port of Charleston. Many South Carolina exports leave the country from Savannah and many Georgia exports leave out of Charleston. The ports of Savannah and Charleston are partners, not competitors. We’re in a new day with bigger ships, and we need deeper ports. We must work together across state lines to the benefit of Georgians and South Carolinians alike.”

"I am grateful for the cooperation of Gov. Haley and others in South Carolina as we work toward progress on both the Savannah Harbor Expansion Project and expansion of the Charleston Harbor, together which will benefit the entire Southeast,” Chambliss said in the joint statement. “It is imperative that we all work together to ensure our region is not left behind after the expansion of the Panama Canal."

“It is critical for Georgia and South Carolina to work together in expanding both our ports to accommodate larger ships and to remain competitive,” said Isakson. “The positive economic impact of expanding both ports is undeniable, not just for our individual states, but for the entire region and the nation. I will continue to do all that I can to help in this partnership between Georgia and South Carolina."

Several weeks ago, Governor Haley of South Carolina made positive statements about supporting the river deepening, the first that had been issued by a top South Carolina official, an important step...and an indication that her office was going to reduce its opposition to the deepening. 

Savannah Democratic political leaders who are close to the Obama Administration have told the Savannah Business Journal that the President 'is not going to tick off South Carolina or the environmentalists - both are too important."   Looks like instead, a regional compromise to invest in both ports is in the offing.   

Oh... and to clear up another matter....Senator Chambliss, who was in Savannah on Monday in advance of the LaHood visit, made a statement about federal funding for the Savannah river project that was not correctly interpreted by a Savannah media company,  according to his Washington, D.C. press office.  

The Senator is concerned that projects such as the deepening which have traditionally been paid for as  part of earmark legislation, be approached in a different manner.  He stated that he wants to look at the methods of federal funding for such projects – in support of the deepening and other such projects.

   

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