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2018 Georgia Election Takeaway: Rural Georgia ain’t going down easy

My Trouble in God’s Country research has been focused primarily on the widening economic, educational and health divides between Metro Atlanta and the rest of the state, especially rural Georgia.  The extent of the political divide has been obvious and well understood for a long time, and it’s not a topic I’ve paid much attention to.

But last Tuesday night, as I watched the election results come in and poked around on the AJC and Georgia Secretary of State’s websites for county-level returns, I noticed that Democratic gubernatorial nominee Stacey Abrams seemed to be lagging behind her party’s 2014 gubernatorial nominee, Jason Carter, in rural Georgia but outperforming him in Metro Atlanta and other urban areas.

Did that mean, I wondered, that urban and rural Georgians were continuing to grow even further apart politically as well as economically, educationally and health-wise?

To answer this question, I pulled top-of-ticket results for the last five general elections in Georgia – the 2010 gubernatorial election, 2012 presidential, 2014 gubernatorial, 2016 presidential, and 2018 gubernatorial.  Yeah, you can quibble with comparing gubernatorial and presidential results, but in this case I think it’s useful.

As a backdrop, it bears noting that virtually everybody agrees that population growth and demographic change are working to the advantage of Democrats and will eventually tip the state back to their advantage.  That’s inarguably true.  But against that backdrop, the first conclusion to be drawn from the 2018 results is this: Rural Georgia ain’t going down easy.

As of the results posted on the Secretary of State’s site Monday morning, November 12, Republican gubernatorial nominee Brian Kemp is leading in 130 mostly rural counties while Abrams is ahead in the other largely urban 29 counties.  The counties Kemp is carrying are home to 2.9 million registered voters versus 3.5 million in the Abrams counties.

With that kind of numerical advantage, you have to wonder how Abrams can be losing.  Two answers.  The first is turnout.  Kemp got a 61.5 percent turnout in his 130 counties versus 59.8 percent in the Abrams counties – not huge, but important in a race as close as this one is.  (As of this writing, the Secretary of State’s website is showing Kemp leading 1,975,843 to 1,916,943.)

The second obvious factor was margin.  Kemp is winning bigger in his small rural counties than Abrams is in her big urban ones.  Which is saying something, because Abrams is ahead by a margin of 66.7 percent to 33.3 percent, or 2:1.  Kemp, though, is running up the score in his 130 counties by a margin of 71.4 percent to 28.6 percent.

And there are some interesting subplots under those topline numbers.  In Metro Atlanta, for example, heavily black and Democratic Clayton County, on the southside, went overwhelmingly for Abrams: 88.2 percent to 11.8 percent for Kemp.  But turnout was only 54.2 percent.  Clayton County gave Abrams her largest margin of victory but one of her smallest turnouts.

On the north side of Metro Atlanta, meanwhile, heavily white and Republican Cherokee and Forsyth counties went for Kemp by a combined margin of 72.5 percent to 27.5 percent — and their combined voter turnout was 63.5 percent, nearly 10 points higher than Clayton County’s.  If Clayton County had matched the Cherokee-Forsyth turnout levels and maintained the same 88:12 split, Abrams would have netted another 12,000 votes.

But I meander.

Back to my original question: Is the political divide widening between Metro Atlanta and Rural Georgia?  The answer is an unequivocal yes – although you might not know it just to look at the statewide results.

In 2010, former Governor Roy Barnes, the Democrat who eight years earlier had surrendered the governor’s office to the first Republican winner in a couple of thousand years, was making a comeback attempt against Republican nominee Nathan Deal; Deal won handily, 55.2 percent to 44.8 percent.

(Caveat # 1: In this analysis, I am ignoring third party candidates and looking only at votes cast for the Democratic and Republican Party nominees.)

In the 2012 presidential election, GOP nominee Mitt Romney got 54 percent of the vote to 46 percent for President Barack Obama, the incumbent Democrat.  In the 2014 governor’s race, Governor Deal beat Democratic challenger Jason Carter by the same 54-to-46 margin.

In the 2016 presidential election, the margin actually got a little closer: Republican Donald Trump beat Democrat Hillary Clinton here in Georgia 52.7 percent to 47.3 percent, a margin of 5.3 percentage points.  And, of course, the margin in the current governor’s race is razor thin: Of the votes cast for either the Democrat or the Republican, Kemp currently has 50.8 percent of the vote to 49.2 percent for Abrams.

(Caveat # 2: The votes here in Georgia are, at this writing, still being counted, with an unknown number of provisional ballots still out.  We may or may not be headed for a recount if not a runoff.  Whatever the final results, they will obviously change the numbers I’m currently using, but I don’t think it will change the overall picture.)

So, over the past decade or so, the Republican margin of victory peaked at a little over 10 percentage points and has lately been shrinking down to a point or so.  But where those votes are coming from has shifted dramatically.

To get at this, I wallowed around in the data for a while and finally wound up breaking Georgia’s 159 counties down into four groups:

  • Big Democratic Counties. These are 16 counties that have at least 25,000 registered voters and have generally voted Democratic over the years. It includes the big ITP counties in Metro Atlanta and a couple of recent newcomers to the Blue column, Cobb and Gwinnett.  More than half the state’s registered voters live in these 16 counties.  In 2010, Barnes carried these counties over Deal by what seemed like a healthy 57.3 percent-to-42.7 percent margin.  This year, Abrams is leading Kemp 2:1 in these same 16 counties.  Put another way, these counties have shifted 9.8 percentage points further into the Democratic column.  One measure of this group’s population growth and rising clout is that Abrams already has more votes from these counties than Barnes and Deal combined in 2010.
  • Small Republican Counties. This is a group of 101 rural counties with fewer than 25,000 registered voters, and it’s pretty much a polar opposite of the Big D counties above.  In 2010, Deal carried these counties 2:1 over Barnes; this year, Kemp is ahead of Abrams just a hair shy of 3:1.  As a group, these counties are 7.7 percent redder now than they were in 2010.  The problem for Republicans is that many of these counties, especially in Middle and South Georgia, are hollowing out and losing population.  They may still be able to run up the score in these areas, but there’s not enough growth to keep up with the Big D counties.
  • Large & Middle-Sized Republican Counties. This is a group of 29 counties with at least 25,000 registered voters that are lining up with Kemp and other Republicans in this election cycle.  It includes most of the suburban and exurban counties surrounding Atlanta, as well as fast-growing communities in North Georgia and bedroom counties around the state (Oconee, Houston, Columbia, etc.).  The good news for Republicans is that these are for the most part growing counties and they are overwhelmingly red.  The less than good news is that they aren’t getting any redder; in fact, as a group, they’re 3.3 percentage points bluer this year than they were in 2010.  One example: Forsyth County gave 85.2 percent of its 2010 vote to Deal and only 14.8 percent to Barnes; this year, Kemp is carrying Forsyth with a relatively meager 71.6 percent to Abrams’s 28.4 percent.  That’s a 13.6 percentage point shift toward the Democrats in a decade.  Still, the GOP’s future in Georgia probably lies in retrenching in these counties.
  • Small Democratic Counties. These are 13 largely rural and heavily black counties with fewer than 25,000 registered voters that are still voting Democrat, but – like the Small Republican Counties discussed above – they’re actually trending Republican.  In 2010, they went nearly 60:40 for Barnes; this year, they’re a paler shade of blue and going 55:45 for Abrams.  If that’s good news for Republicans, the bad news is that, combined, these counties cast fewer than 90,000 votes.

So, urban Georgia is getting bluer and rural Georgia is getting redder.  This is obviously just a local example of the divide taking place all over the country and of the extreme polarization that has afflicted U.S. politics in recent years.

This chart shows Democratic and Republican votes by groups of counties for the 2010 and 2018 gubernatorial elections.

A key takeaway from this chart and analysis is this: If Brian Kemp hangs on and wins this election, he’ll owe his victory to two very disparate voting blocs of Republicans – very affluent, well-educated suburban and exurban voters on the one hand, and some of the least educated, poorest (and for that matter least healthy) voters in rural Georgia on the other.  My hunch is that their public policy priorities are very different, and balancing their interests will require a nifty bit of political magic.

Here’s the list of counties by the groups described above:

  • Big Democratic Counties: Bibb, Chatham, Clarke, Clayton, Cobb, DeKalb Dougherty, Douglas, Fulton, Gwinnett, Henry, Liberty, Muscogee, Newton, Richmond, Rockdale.
  • Big & Middle-Sized GOP Counties: Barrow, Bartow, Bryan, Bulloch, Camden, Carroll, Catoosa, Cherokee, Columbia, Coweta, Effingham, Fayette, Floyd, Forsyth, Glynn, Gordon, Hall, Houston, Jackson, Laurens, Lowndes, Oconee, Paulding, Spalding, Thomas, Troup, Walker, Walton, Whitfield.
  • Small Democratic Counties: Baldwin, Calhoun, Clay, Hancock, Jefferson, Macon, Randolph, Stewart, Sumter, Talbot, Taliaferro, Terrell, Warren.
  • Small Republican Counties: Appling, Atkinson, Bacon, Baker, Banks, Ben Hill, Berrien, Bleckley, Brantley, Brooks, Burke, Butts, Candler, Charlton, Chattahoochee, Chattooga, Clinch, Coffee, Colquitt, Cook, Crawford, Crisp, Dade, Dawson, Decatur, Dodge, Dooly, Early, Echols, Elbert, Emanuel, Evans, Fannin, Franklin, Gilmer, Glascock, Grady, Greene, Habersham, Haralson, Harris, Hart, Heard, Irwin, Jasper, Jeff Davis, Jenkins, Johnson, Jones, Lamar, Lanier, Lee, Lincoln, Long, Lumpkin, Madison, Marion, McDuffie, McIntosh, Meriwether, Miller, Mitchell, Monroe, Montgomery, Morgan, Murray, Oglethorpe, Peach, Pickens, Pierce, Pike, Polk, Pulaski, Putnam, Quitman, Rabun, Schley, Screven, Seminole, Stephens, Tattnall, Taylor, Telfair, Tift, Toombs, Towns, Treutlen, Turner, Twiggs, Union, Upson, Ware, Washington, Wayne, Webster, Wheeler, White, Wilcox, Wilkes, Wilkinson, Worth.

© Trouble in God’s Country 2018

Breaking News: Pierce County GOP opposes secession

Well, darn.

For a few days there I thought we had a major story brewing down in Pierce County.

Leaders of the Republican Party in that deep South Georgia community had included a question on Tuesday’s party primary ballot asking whether the “counties South of Macon (should) join together to form the 51st state of South Georgia.”

Going into Tuesday’s election, I would have bet a cup of coffee it had a fair chance of passing. I have spent a good bit of time in South Georgia over the years and folks down there can be a provincial lot.  Many don’t much care for Atlanta.

But in a perhaps surprising display of common sense, Pierce County’s Republicans voted better than two-to-one not to break away from North Georgia and Metro Atlanta.  The final tally was 703 ayes to 1,844 nays.

On a personal level, I’ll confess to a certain amount of disappointment a new State of South Georgia is now apparently off the table.

It probably would have moved my home state of Mississippi up in the national rankings overnight.

In one fell swoop, it would almost certainly have created the poorest, sickest and least educated state in the union. Folks in Mississippi (and for that matter Alabama) would have been able to look forward to saying “thank God for South Georgia” when all the new national education and economic rankings come out each year.

Alas, I guess that’s not to be.

More seriously, the Pierce County initiative, unsuccessful though it was, does beg a serious discussion about the relationship between South Georgia (and, more generally, rural Georgia) and Metro Atlanta in particular – especially given the way the head of the Pierce County Republican Party, Kay Godwin, framed the issue going into Tuesday’s election.

“We don’t get anything from Atlanta,” she told The Blackshear Times. “This is an effort to force them to pay attention to us.  We are not going to secede, but I hope it passes so maybe it will produce action across the state.”

As the talking heads on cable news like to say, there’s a lot there to unpack.  I’ve emailed Ms. Godwin and asked her to expand on her comments, but at this writing I have not heard back from her.

Let’s start with “we don’t get anything from Atlanta.”

That’s nonsense.

The reality, probably not fully appreciated in any region of the state, is that Metro Atlanta has been subsidizing the rest of the state — and South Georgia in particular — for decades.

The Fiscal Research Center at Georgia State University took a mind-numbingly deep dive into this issue nearly a decade ago and found, basically, that as of 2004 (the most recent year for which the author could get comprehensive data) the 10 core Metro Atlanta counties generated 51 percent of state government revenues and consumed only 37 percent of the state’s expenditures, leaving the rest for the other 149 counties.

That’s very much in line with my own Trouble in God’s Country (TIGC) research.  Working with federal IRS data that’s available online, I found that in 2013 the 12 counties I classify as Metro Atlanta incurred right at two-thirds of the state’s federal tax liability — $20.4 billion versus $10.6 billion for the other 147 counties – while consuming, to cite just one example, only about a third of the state’s Medicaid expenses. And that was with less than half the population: 4.65 million people in Metro Atlanta versus 5.34 million in the other 147 counties.

Let’s narrow that focus to South Georgia. Working with that same 2013 data, we find that the 56 counties that make up my TIGC South Georgia region incurred about $1.7 billion in 2013 federal income tax liability, or about 5.5 percent of the state’s total.  At the same time, it consumed about 17.2 percent of the state’s Medicaid benefits.  The level of subsidy implied by these numbers should cause local leaders to pause before they start complaining about Atlanta not doing anything for them.

Truth is, South Georgia (and for that matter most of rural Georgia) is in a world of hurt. In some respects these areas are literally dying, and the breadth and scope of the problems afflicting just about everything from the gnat line south demand some sort of comprehensive solution.

I’ve touched on economics in this piece, but I could make parallel cases using educational and healthcare data.

South Georgia is the least educated and least healthy region of the state, and those facts translate into both an inability to support itself and a dependency on public support for Medicaid and other services.

Atlanta will have to be involved — both in the form of state-driven remedies and as a source of necessary funding. The longer the problems go untended, the bigger — and more expensive — they will become.

The real problem for Ms. Godwin and South Georgia is that these societal and fiscal problems are coming to a head just as their worst political nightmares are also coming true.

For all of Georgia’s history — up until right about now — rural Georgia ruled the political roost. Rural areas generally were smart enough to elect wily young politicians to the legislature and leave them in place to hold Atlanta at bay.

But that’s changing.

By my count, just under half of the current House and Senate districts lie partly or wholly within my TIGC 12-county Metro Atlanta. With the next census and reapportionment, political power will concentrate even further in Metro Atlanta, probably giving it a majority of the legislature.

South Georgia can forget about ever again electing a governor.

What this means is that the political powers who will soon hold virtually all the purse strings may soon be asking why they should be diverting tax dollars generated in Metro Atlanta —which has its own problems — to South Georgia.

Given that reality, South Georgia probably needs a better strategy than demanding “action” and “attention” by threatening to secede.

Who knows? We might take you up on it.

© Trouble in God’s Country 2018

 

R.I.P., House Bill 887. We hardly knew ye.

Well, that didn’t take long.

House Bill 887, the Georgia Communications Services Tax Act, seems to have pretty much crashed and burned within days of being introduced, per today’s AJC.

From the story, by state capitol reporter Mark Niesse:

What’s left of the legislation is a policy for rural internet expansion without any funding.

The latest version of HB 887, which shrunk from 46 pages to 16 pages Thursday, would allow local electric membership corporations to provide internet services, reduce fees EMCs can charge for internet providers to use their poles and set a policy for rural communities to qualify for potential future grant funding.

This is probably a better starting point for the rural broadband discussion anyway.  More news as it develops.

 

 

The real problem with HB 887: it starts in the wrong place

Yesterday I posted an initial piece dissecting some of the mechanics of House Bill 887, the Georgia Communications Services Tax Act, and said I’d loop back for a second swing at “the real problem” with the bill.  Here goes.

The real problem is that it proposes to serve the wrong areas – or at least the wrong areas first.  Specifically, it says that the first three rounds of state grants to be made under the proposed “Georgia Reverse Auction Broadband Deployment Program” should go to “unserved” areas.

That sounds natural enough until you actually think about it.  There’s a reason those areas are unserved.  There’s hardly anybody there.  If there were, AT&T, Comcast and other telecom and cable providers would already be investing their own capital in sparsely populated rural counties.  At this point, no amount of publicly-funded broadband (which, by the way, would be paid for primarily Metro Atlanta taxpayers under the current bill) would do much to address the basic problems faced by Georgia’s poorest, least-educated and sickest communities.

In most of my Trouble in God’s Country research and writing, I’ve tried to stick to data analysis and avoid editorial commentary.  In various presentations, though, I’ve ventured an unpopular opinion that I’ll repeat here: we’re already into a triage situation in much of rural Georgia, especially from the gnat line south.  With some communities, it’s time to give them a toe tag and stop throwing good money after bad.

Which is not to say our state government should abandon these areas altogether.  One of my reasons for pursuing my Trouble in God’s Country research is that I believe the continued decline and deterioration of rural Georgia will simply become an ever-larger albatross around the neck of the state and, inevitably, Metro Atlanta.  Better to address the problems now rather than let them fester.

So I applauded the creation of the House Rural Development Council and their efforts over the past nine months.  I just think they got to the wrong conclusion, at least on rural broadband, and that by trying to tackle the “unserved” areas first, they’re starting at the wrong end of the problem chain.

The better starting point, in my view, would be the state’s regional cities – Macon, Rome, Augusta, Savannah, and Columbus, et al.  With just a few exceptions these communities are relatively stagnant or in various states of decline and deterioration.  Albany, once a very vibrant South Georgia city, now ranks as one of the 10 most “distressed” small-to-mid-sized cities in America – right behind Flint, Mich., in the 2017 Distressed Communities Index published by the Economic Innovation Group.  If these trends are allowed to continue – if these regional cities are essentially allowed to fail – then the collapse of the rural areas surrounding them will only accelerate.

My own politics on this kind of thing are pretty liberal.  I don’t have a philosophical problem with spending public money on big problems like this.  I don’t even object to Metro Atlanta tax dollars being diverted to address out-state problems.  I think it’s in Metro Atlanta’s interest to invest in other areas of the state and, in particular, to help revitalize and reinvigorate the regional cities.  I don’t know exactly how to do that, but if the decay continues, sooner or later – and probably sooner – Macon’s problems will begin to wash up on Metro Atlanta’s doorstep.

Further, economic development doesn’t have to be a zero sum game.  As I told the AJC’s Bill Torpy last week, Metro Atlanta has morphed into something like an intergalactic black hole that is pulling in the vast majority of the state’s economic prowess and educational muscle.  As the region continues to expand, it seems to me it ought to be possible to develop what amount to colonization strategies aimed at purposefully deploying more of that economic and educational strength to satellite cities that are increasingly being pulled into Atlanta’s orbit: Macon, Columbus, Carrollton, Rome, Gainesville, Athens, etc.  Working with those cities to help beef up their industrial and technological infrastructures – and their human capital – should be a win for them as well as Metro Atlanta.

One of the ideas that came out of the House Rural Development Council was to give tax credits to affluent Georgians to move to rural Georgia – in other words, to literally use tax dollars to pay people to move to those areas.  That proposal was apparently strangled in its legislative crib, and appropriately so.

But finding ways to create targeted incentives for people – and businesses – to move to the regional cities might actually make sense.  To that point, so might an effort to modernize the state’s job tax credit program.  For years now, Georgia (like many other states) has maintained a job tax credit program aimed primarily at providing incentives for businesses to create jobs in the state’s poorest counties.  The Georgia Department of Community Affairs, which administers the program, puts 71 counties in that poorest group of counties; go into, say, Mitchell County and create just two jobs and the state will give you $8,000 in tax credits for up to four years against your Georgia corporate income tax.  At the other end of the spectrum, to get a job tax credit in Forsyth or Gwinnett counties, you’d have to create at least 25 jobs, and the tax credit per job would only be $1,250.  (And, yes, that means folks in Forsyth and Gwinnett counties are helping subsidize job creation in Mitchell County.)

Frankly, I’m not sure two new jobs in Mitchell County is worth $36,000 in state tax breaks.  But the establishment of a new software engineering company and the creation of a couple of dozen or so high-skilled jobs in Rome or Macon or Gainesville might be worth a good bit more than that – especially if the local governments put some skin in the game and, as part of the effort, make meaningful commitments to supporting the rural communities surrounding them.

As I’ve said before, these are tough nuts to crack and I don’t have all the answers.  But I’m pretty sure that plowing millions of dollars into rural broadband – at least right now – isn’t one of them.

The rural broadband train arrives at the Gold Dome. Grab your wallet.

Last May I was asked to present some of my Trouble in God’s Country research to the opening session of the House Rural Development Council down in Tifton.  The first question I got after completing my presentation was about something I hadn’t even touched on – the idea of running broadband to rural Georgia.  The next morning the legislators heard four presentations about rural broadband.  It was clear even then that the rural broadband train was being stoked up and prepped for a high-speed run to the Gold Dome.

It pulled into the State Capitol last week in the form of House Bill 887, aka the Georgia Communications Services Tax Act.  I first heard about it from Bill Torpy, The Atlanta Journal-Constitution’s “At-Large” columnist.  Torpy is an occasional reader of my TIGC blog who also tends to get a little worked up when the state government siphons money out of Metro Atlanta to fund cockamamie schemes in, as he puts it, the boonies.  He called to talk about it and get my take for a column that ran in Sunday’s paper.

He’s not wrong about Metro Atlanta getting hosed, of course; it was ever thus – although H.B. 887 may constitute the most audacious attempt to fund a rural boondoggle with Metro Atlanta tax dollars since Sonny Perdue’s “Go Fish Center” in Houston County.  My admittedly unkind assessment is that Metro Atlantans are now being expected to sit in grid-locked traffic so that Donald Trump’s South Georgia supporters can get faster downloads of old Stormy Daniels videos.

H.B. 887 is a beast of a bill.  It’s 45 pages long and has a ton of moving parts.  The basic funding mechanism calls for slapping a new four percent sales tax on a whole slew of communications products and services – apparently including premium streaming services like Netflix and Amazon Prime – to help pay for rural broadband.  Because the vast majority of those subscriptions and services are in areas that already have high-speed internet (e.g., Metro Atlanta), their taxpayers will be footing most of the bill.

How would that work?  Well, another component of the bill is something called the “Georgia Reverse Auction Broadband Deployment Program.”  This is a scheme our leaders cooked up to pay telecom and cable companies to run broadband technologies throughout rural Georgia.  I’m guessing it’s called a “reverse auction” because ordinarily governments auction the right to use right-of-way or wireless spectrum to serve specific areas to companies that are in that business.  Under H.B. 887, our state government would use largely urban tax dollars to pay companies like AT&T, Verizon, Comcast and no doubt others to deploy fiber optic cable and other high-speed broadband technologies to areas they won’t serve on their own.

With the new tax revenues, though, the pot is obviously right.  One tip-off is that, by my count, the telecom and cable industries are now flooding the zone at the State Capitol with more than three dozen lobbyists.

What kind of money are we talking about here?  Well, let’s do some rough math.  At last May’s House Rural Development Council, Blake Doss of the House Budget and Research Office gave the legislators a presentation and told them that an estimated 626,070 rural Georgians don’t have access to what the Federal Communications Commission (FCC) defines as broadband: 25 megabits per second of download speed and 3 MBS upload (more about this below).

Doss also told the legislators it could cost up to $40,000 per mile to run fiber optic cable “in rugged areas.”  He never got around to saying how many miles of cable would need to be run, but we can swag that.

I’m working with five-year-old Georgia Department of Transportation (GDOT) data here, but these numbers don’t change much in that amount of time.  I find just under 800,000 people living in the unincorporated areas of 85 largely rural counties in Middle and South Georgia (never mind the small cities and towns).  Those same areas, according to the GDOT data, were covered by 36,285 miles of road.  For the sake of discussion, let’s be charitable and assume that half of those folks already have access to broadband and that only about 400,000 don’t.

Let’s also assume a 50 percent split in road miles – that the 400,000 unserved rural Georgians south of the gnat line live on about 18,000 miles of road.  Let’s also assume that Mr. Doss’s $40,000-a-mile estimate is high and that it’s really only $30,000.  Do the math and, conservatively, you’re looking at more than half-a-billion dollars to wire rural Middle and South Georgia.

So, real money.  More than Medicaid Expansion money.  In the general vicinity of Port of Savannah money.

Now, taxpayers won’t be picking up the whole tab.  As proposed, the aforementioned “reverse auction” program calls for telecom providers interested in wiring rural Georgia to bid for the rights in a given area, with what amounts to the high bid being a key criteria for selection.  Which means they’ll have some skin in the game.  Which means they’ll need a return on the investment.  Which is going to be tough, even with a big state subsidy.

Let’s use Early County, hard on the Alabama line down in Southwest Georgia, to flesh out an example.  H.B. 887 calls for pouring money into “unserved” areas first (more about which in a later post), and I’m pretty sure Early County qualifies.  Early County is home to right at 11,000 people who live in just under 5,000 homes strung out along 560 miles of road (including incorporated and unincorporated areas).  Even at my reduced estimate of $30,000 a mile, that’s about $16.8 million to wire Early County for broadband, or about $3,400 per house.

Even if the telecom provider that wins the reverse auction to serve Early County puts up only half the capital, that’s still a big investment it will have to recover.  Let’s round the telecom provider’s share of the capital investment down to $8 million.  If they sign up every single household in Early County, that’s about $1,700 in capital costs, per subscriber, the company has to recoup before it can begin to make money.

Which brings us to one of two final problems with H.B. 887 that we’ll deal with today.  First, the broadband as defined in this legislation ain’t all that broad – 10 MBS on the download and 1 MBS on the upload.  The current FCC definition of broadband is 25 MBS up and 3 MBS down.  Full gigabit service – 1,000 MBS – is now available throughout much of Atlanta.  Scanning the web, I couldn’t even find a 10/1 offering.  That’s your granddaddy’s broadband – think DSL with a shot of espresso.

Which brings us to the second and final issue we’ll deal with today.  H.B. 887 requires the vendors not to charge their new rural customers any more than they charge customers in other parts of the state for “the same or similar services.”  AT&T’s full gig service – 1,000 MBS on the download – costs $80 a month in Atlanta; I found an Xfinity 25 MBS offering for $19.99 a month, or less than a buck a megabit.  There’s a lot of wiggle room in “same or similar,” so let’s say the providers can get away with charging the folks in Early County $20 a month for 10/1 service.  At that rate, with all 5,000 homes signed up, they’ll get their capital back in just over seven years.

As I said above, this is a swag and no doubt flawed.  Maybe I’m missing some puts and takes that’d help this make more business sense.  I sure hope so.  Because H.B. 887 is pulling out of the station, and it sure looks like we’re all about to get taken for a ride.

(Up Next: The real problem with House Bill 887.)

Thanks, Mr. President, for giving us a new way to think about Georgia’s declining regions

By Charles Hayslett

File this under every-cloud-has-a-silver-lining.  President Trump’s characterization of Haiti and various South American and African countries as “shitholes” may have torpedoed a DACA deal, triggered a global diplomatic uproar and made it more likely that the federal government will shut down this weekend.  On the bright side, it also gives us a memorable way to think about the deteriorating counties and communities right here in Georgia.

Now, because I am a nice guy and don’t want to offend my friends in rural Georgia (and especially because my wife is from South Georgia and would not appreciate it), I am going to refrain from personally applying the president’s epithet to our state’s more unfortunate areas.  You’ll just have to use your imagination.

In the wake of the president’s unfortunate description, his surrogates have worked hard to shift the debate from the seemingly racist overtones of Trump’s reported language to a broader discussion about a merit-based approach to immigration.  I’m generalizing here, but they seem to be saying that Trump’s language wasn’t a commentary on the racial make-up of the nations he referenced (overwhelmingly black or brown), but the supposed economic prowess and productivity of their citizens.

I’m happy to take them at their word.  In that context, and by that standard, it seems reasonable to suggest that America has its own share of such areas – specifically, counties and communities that have long been on a downhill slide just about any way you want to measure it: economically, educationally, in terms of health status, etc.  It also seems reasonable to point out that these areas voted overwhelmingly for Donald J. Trump, and to wonder what he would like to do for voters who were among his most ardent supporters – who, indeed, were a large chunk of his base.

To be fair, Trump also won many of the state’s most affluent counties, which also tend to be deeply Republican, including growing suburban and exurban counties like Fayette, Forsyth, Cherokee and Dawson.  But a review of 2016 General Election results suggests Trump owes a large measure of his margin in Georgia to what might indelicately be called the, well, you-know-what vote.

Altogether, Trump carried 127 counties in Georgia.  Of the 4.7 million people living in those counties, 77.1 percent were white and 18.4 percent were black.  Based on the most recent educational attainment data available, they were also home to slightly more high school dropouts than college graduates – 625,808 adults without a high school degree versus 625,161 with at least a bachelor’s degree.  In contrast, the other 32 counties that went for Clinton were home to more than twice as many college graduates than high school dropouts – 1.2 million to 532,000.

That educational disadvantage translates, among other things, into weaker economic output, poorer health and higher healthcare costs.  The 127 Trump counties generated $10.45 billion in 2013 federal taxes (the most recent IRS data I’ve analyzed) versus $20.5 billion from the 32 Clinton counties.  At the same time, while generating basically twice as much in federal taxes, the Clinton counties (home to the larger population) consumed only about 17 percent more in FY2017 Medicaid costs than the Trump counties: $5.03 billion versus $4.3 billion.  One result of that math is that Medicaid patients from the Trump counties cost the state about 2.2 percent more per patient than those in the Clinton counties: $5,136 to $5,026 each.

What’s more, if educational trends are any indication, the economic and health gaps will almost certainly continue to widen.  In the fall of 2016, the University System of Georgia admitted a total of 41,906 students from throughout the state; 23,325 came from the Clinton counties and 18,581 from the Trump counties. 

But those overall numbers actually mask the extent of the differences.  Of the 41,906 students admitted that fall, 11,756 were accepted at the state’s top four research universities – Georgia Tech, the University of Georgia, Georgia State University and Regents University.  Of those, more than twice as many were from the more economically productive Clinton counties than the Trump counties: 8,421 versus 3,335.

An even starker picture emerges when you look at the state’s most economically depressed counties.  The Georgia Department of Community Affairs (DCA) manages the state’s job tax credit program, which is designed to steer businesses and jobs to the state’s poorest counties by offering substantial tax credits for each new job created.  This year, DCA lists 71 counties in its Tier 1 category.  Only 721 students from those counties made it into one of the top four research universities.

And even that number is deceptive.  Of the 71 Tier 1 counties, the only one in Metro Atlanta is Clayton County, which sent 233 high school graduates to one or the other of the research universities.  The other 70 counties split the remaining 488 students.  Ten of those failed to send a single student to one of the top four Georgia schools.

In contrast, Fulton County, whose 5th congressional district Trump once said was in “horrible shape and falling apart,” sent 3,924 students to University System institutions in the fall of 2016, more than all the Trump counties combined; 1,971 of those were selected to one of the top four research universities.  It also generated 8.5 times as much in 2013 federal taxes as it consumed in FY2017 Medicaid benefits (and, of course, it went heavily for Clinton over Trump).

My purpose in writing this is in no way to denigrate Georgia’s poorest and least educated counties, or to in any way re-litigate the 2016 presidential campaign (although I suppose candor requires an acknowledgement that I am no fan of President Trump).  Indeed, I have devoted a fair chunk of the past several years to researching and writing a book aimed at putting a spotlight on the widening divide between Metro Atlanta and the rest of Georgia, especially the state’s poorest areas, and to exploring public policy solutions to the challenges posed.  It’s a tough nut to crack, and there are no easy solutions – either for, well, Georgia’s you-know-what holes, or for the more affluent areas that will inevitably be stuck with the tab. 

In an odd sort of way, President Trump may have performed a useful service where this issue is concerned.  In condemning countries whose emigrants to the United States he obviously sees as unproductive and uneducated drags on the nation’s resources, he has invited what could be a useful discussion about American communities that could be characterized in the same manner.

 

Revisiting Georgia’s Title Ad Valorem Tax System: A billion-dollar raid on local government treasuries

By Charles Hayslett

(Author’s Note: This is the first of at least two and probably three pieces I’m writing on the impact on local governments of Georgia’s transition from a traditional sales-and-property tax system of taxing motor vehicles to a complicated new “title ad valorem tax” system.  This is an overview and stage-setter; deeper dives into regional and county-level impacts will follow.)

Think of this as a political cold case, an opportunity to revisit the scene of an old legislative crime five years after the fact and assess the violence with fresh eyes.  Our case today is a bill passed by the Georgia General Assembly in 2012.  Known officially as House Bill 386, this measure was widely ballyhooed as “tax reform.”  This alone should have been evidence enough that the General Assembly was up to no good.  Further evidence lies in the timing.  The 56-page bill was shared with members of a specially-appointed House-Senate committee on taxation a scant 10 days before the 2012 session was scheduled to end.  When then-House Minority Leader (and current Democratic gubernatorial candidate) Stacey Abrams had the temerity to ask about fiscal models that had been used to gauge the financial impact of HB 386’s provisions, then-House Ways and Means Committee Chairman Mickey Channell “responded curtly,” according to one report, that “we don’t have that available right now.”

Not to worry.  The very next day HB 386 was approved overwhelmingly by the full House of Representatives (only nine members, all Democrats, mustered the nerve to vote against it; Abrams wasn’t one of them) and immediately transmitted to the Senate, which passed it unanimously two days later.  Less than a hundred hours after it rolled off the legislative printing press, this 2,000-line bill was out of the General Assembly and on its way to Governor Nathan Deal, who called it “good news” and said: “It means our state is more competitive and is a state where we can grow jobs.”

Revisiting HB 386 five years later is a little like going back to the scene of a massacre and discovering that nobody bothered to remove all the bodies, let alone mop up the blood.  The joint House-Senate taxation committee was supposed to be following up on the work of a 2010 Special Council on Tax Reform and Fairness for Georgians.  Created by state law, the Council was headed by former Atlanta Olympics czar A.D. Frazier and made up of Frazier and nine other well-respected business leaders and actual economists.  This group produced a thoughtful 34-page report that proposed pretty reasonable changes to the full range of taxes imposed by the state of Georgia.

Those recommendations were, naturally, largely ignored.  Instead, the leaders of the joint House-Senate tax committee ginned up a grab-bag of goodies for a lot of the usual suspects, including agricultural equipment retailers and Delta Air Lines.  But all that didn’t get much media attention, thanks to what one report described as the “wham-bam-thank-you-ma’am” means by which the legislation was rammed through the General Assembly.  Instead, the bill’s legislative champions focused on the lead section of the bill, which overhauled the way motor vehicles are taxed in Georgia, and so did the press.

For now, so will we.  To cut to the chase, this section of the bill alone amounted to a massive raid on local government treasuries by state government.  Working with Georgia Department of Revenue data detailed in a recent report by Georgia State University’s Fiscal Research Center, it’s now clear that this one provision of HB 386 shifted something on the order a billion dollars in motor vehicle taxes from Georgia’s cities, counties and school systems to the state treasury between 2014 and 2016 alone.  Once 2017 numbers are in, that cumulative total will almost certainly rise even further.

Here’s how it worked.  Before HB 386, Georgians paid two types of taxes on their motor vehicles – a sales tax at the time of purchase and then an ad valorem (or property) tax every year thereafter.  These two taxes were important sources of revenue for Georgia’s state and local governments.  The sales tax, paid at the time of purchase, was divided between the state and local governments; the state got its 4 percent and the counties got whatever their local sales tax was set at – generally between 2 and 4 percent.  In subsequent years, the counties collected the ad valorem taxes and divided the proceeds three ways amongst themselves and local municipal governments and school systems.  As motor vehicles aged, these ad valorem taxes declined.

It was a tried and true system, but former House Speaker Glenn Richardson (R-Douglasville) had begun to rail some years before about the fact that these ad valorem taxes came due in the month in which the motor vehicle owner was born.  He complained bitterly that this amounted to a “birthday tax” on hapless Georgians and set out to do away with it.  Richardson himself would leave office in disgrace a year or so afterward, but killing the birthday tax for some reason remained a cause celebre among House Republicans and became a key rallying cry in support of HB 386.

In place of the old sales-and-property tax system and its evil birthday tax, they unveiled what they called the Title Ad Valorem Tax.  Now known as TAVT, this is a convoluted Frankenstein monster of a system that appears (fortunately for the rest of America) to be unique to the Great State of Georgia.  (I’ve Googled it and called everybody I can think of to call, and I can’t find anybody who’s aware of anything like it anywhere else in the country.)

Basically, it functions like a sales tax that is paid at the time of purchase.  When it first went into effect, the new TAVT tax was set at 6.5 percent of the cost of the vehicle and the proceeds were split between the state and the county; initially, under HB 386, the state got 57 percent of that 6.5 percent and the local county got the other 43 percent.  Since that first year the rate has increased, first to 6.75 percent and now to 7 percent (where it will likely stay) and the split (again, as provided for in the legislation) has been shifting in favor of the local governments.  As of 2016, that 7 percent tax was being split 53.5 percent-to-46.5 percent in favor of the state.  Over time, the law calls for the split to shift incrementally in favor of the local governments.

That was one of two major elements to the HB 386 overhaul of the way the state taxes motor vehicles.  The other was that the state began taxing two new categories of motor vehicles: casual sales between individuals (this was one of the few Special Council recommendations that survived the legislative shredder), and motor vehicles that are moved into the state.  Bottom line, the TAVT section of HB 386 did away with annual ad valorem taxes, sought to replace that lost revenue with the new “title” taxes on casual sales and motor vehicles moved in from out of state, and changed the way the overall pie was carved up.

By my arithmetic, that trade-off has so far turned out to be about a wash – maybe even a little bit of an overall money-loser.  Under the new TAVT, actual total motor vehicle revenue for the state and local government combined has grown from $1.67 billion in 2012 to $2.01 billion in 2016.  If the old system had remained in place and the state and local tax streams had continued to increase at their respective 2010-2012 growth rates, total revenues for 2016 would have hit $2.05 billion.

While much of the debate that surrounded HB 386 has been lost in the political fog that usually envelops the State Capitol, various legislators, lobbyists and policy wonks tell me there was a lot of discussion about the need to “keep local governments whole” – at least over the long haul.  At that, HB 386 has so far failed miserably.

The table below (using DOR data drawn from the GSU Fiscal Research Center report) compares actual motor vehicle revenues collected by the state and local governments with (for the years 2014 through 2016) what they would have collected if their revenues had been allowed to continue to grow at their 2010-2012 growth rates, which averaged 3.7 percent per year for state government and 5.9 percent per year for local governments.  (2013 was omitted from the Fiscal Research Center report because it was a transition year.)

  State Government Actuals for all years shown Local Government Actuals for all years shown State Government motor vehicle revenue actuals for 2010-2012 and projections for 2012-2014 @ 2010-2012 growth rate Local Government motor vehicle revenue actuals for 2010-2012 and projections for 2012-2014 @ 2010-2012 growth rate
2010 $472,850,810 $1,040,287,022 $472,850,810 $1,040,287,022
2011 $516,340,012 $1,120,536,551 $516,340,012 $1,120,536,551
2012 $506,622,862 $1,165,640,024 $506,622,862 $1,165,640,024
2014 $787,251,834 $1,164,914,899  $    544,806,520  $        1,307,243,140
2015 $899,534,821 $1,123,206,907  $    564,964,362  $        1,384,370,485
2016 $1,018,812,824 $993,062,894  $    585,868,043  $        1,466,048,344
2014-2016 Totals $2,705,599,479 $3,281,184,700 $1,695,638,925 $4,157,661,968

The two left-hand columns show actual state and local government motor vehicle revenue totals for the years shown, as reported in the GSU Fiscal Research Center report.  The two right-hand columns repeat the actual data for 2010 through 2012 and show what the state and local motor vehicle revenues would have been if the old sales-and-property tax system had been left in place and state and local recent growth rates had continued.

Bottom line, the state government’s actual revenues for the period 2014-2016 are just over a billion dollars higher than they would have under the old system and at the old growth rate, while local governments are down a cumulative $876 million.

In a follow-up post soon, I’ll take a deeper dive into how TAVT affected counties in various parts of the state.  Spoiler alert: Rural counties got screwed the worst.

South Georgia vs. Gwinnett County

By Charles Hayslett

Here’s an easy way to understand the widening gap between Metro Atlanta and the rest of Georgia.

Compare all 56 counties of interior South Georgia to Gwinnett County alone.

Gwinnett County’s 2013 population was estimated at 859,304 – just under three-fourths of the 1.16 million people living in our 56-county South Georgia region.

But despite that population disadvantage, Gwinnett County:

  • Generates more income and contributes more in taxes than all 56 counties of South Georgia combined. According to IRS data, Gwinnett County’s total income for 2013 was $21.2 billion versus $17.4 billion for South Georgia.  Similarly, Gwinnett County taxpayers paid $2.5 billion in federal taxes while South Georgia taxpayers contributed $1.7 billion.
  • Consumes substantially less in social services than South Georgia. In 2013, as one example, Gwinnett County consumed less than a third as much in Medicaid services than South Georgia.  The federal share of South Georgia’s Medicaid costs totaled $927.6 million; Gwinnett County, $266.2 million.  The picture for SNAP (food stamps) and other social benefits is similar.South Georgia vs Gwinnett County
  • Is home to significantly more college graduates than South Georgia. Based on data compiled by the U.S. Department of Agriculture’s Economic Research Service (ERS), there were 175,290 college graduates in Gwinnett County over the period 2009-13 versus 110,576 for all of South Georgia.  This hasn’t always been the case.  As recently as 1990, Gwinnett County and South Georgia were basically tied in this category: 65,281 for Gwinnett and 63,073 for South Georgia.
  • Sends more students to University System of Georgia colleges than all of South Georgia. This is also a recent development.  A decade ago South Georgia still sent significantly more kids to college than Gwinnett County – 5,117 versus 3,762.  But by 2011 they were basically tied.  South Georgia sent 5,498 kids to college while Gwinnett County sent 5,493, according to University System of Georgia data.  Since then the gap has widened steadily, and in 2015 Gwinnett County sent 1,100 more freshmen to University System colleges than South Georgia.
  • Is substantially healthier than South Georgia. Using premature death rates as a proxy for health status, Gwinnett County is about twice as healthy as South Georgia.  The 2015 YPLL 75 rate for the 56-county South Georgia region was 9,823.3; for Gwinnett County, it was 5,163.2 (with YPLL 75 rates, the lower the number, the better).   In this category, South Georgia has actually gained a little ground over the past 20 years.  It’s improved about 5.4 percent over that period while Gwinnett County has been essentially flat.  But South Georgia’s numbers in this category are abysmal while Gwinnett County’s are pretty close to optimal, especially for a county as large and diverse as it is.  For 2015, Gwinnett County’s YPLL 75 rate was the fifth best in the state, and it has consistently been in the top tier of counties in this category.
  • Produces about half as many criminals as South Georgia.   In 2015, according to Georgia Department of Corrections data, South Georgia sent more than twice as many people to prison than Gwinnett County did: 2,403 for South Georgia versus 1,049 for Gwinnett.  The picture for new probationers is similar: 5,956 for South Georgia versus 2,630 for Gwinnett County.

In a future post, we’ll take a look at political and cultural trends in Gwinnett County and South Georgia.

Copyright (c) Trouble in God’s Country 2016

 

A Data Mash-Up: University System of Georgia vs. Georgia Department of Corrections. It’s not pretty.

Spend much time sifting through reams of data about Georgia counties and sooner or later you’ll stumble across an interesting factoid you weren’t even looking for.

Here’s one example: Georgia convicts more people of crimes than it sends to college.

Maybe that’s not surprising, but it still seems a little troubling, and it may be one reasonable indicator of the overall social health of a community.

I was pursuing two different lines of research – one with University System data and the other with Department of Corrections statistics – when I noticed the contrast.

Ten years ago, in 2006, 36,202 Georgians matriculated as freshmen at one of the state’s colleges or universities, according to University System of Georgia data.  That same year, a total of 66,255 were either convicted or pled guilty to crimes, according to Georgia Department of Corrections (DOC) data.  This group included 44,762 who were placed on probation and another 21,493 who were sent to prison.  That works out to 1.83 convicts for every college freshman.

Ten years later, by 2015, that ratio had improved.  The number of college freshmen was up to 42,908 and the number of total convicts was down to 59,111, giving us about 1.38 new people entering the corrections system for every new college freshman.

That improvement was not, however, spread evenly across the state.  In 2006, all five of our Trouble in God’s Country regions – Metro Atlanta, Coastal Georgia, Middle Georgia, North Georgia and South Georgia – were cranking out more convicts than college freshmen.

By 2015, Metro Atlanta had turned that around and was producing a few more college freshmen than total convicts – 22,903 college freshmen to 22,042 convicts.  The other four regions still had negative college freshmen-to-convict ratios.

The key driver in that change has been a gradual but steady shift in where Georgia’s college freshmen come from.

What might be called a “regional share of criminals” went largely unchanged between 2006 and 2015.  Every single region finished the 10-year stretch within a single percentage point of where it started.  Metro Atlanta’s share of new convicts was exactly the same in 2015 as it had been in 2006 – 37.3 percent.  Coastal Georgia and Middle Georgia saw their shares drop by a fraction of a point, while North Georgia and South Georgia each eked up by less than a point.

But the distribution of college freshmen did change significantly.  In 2006, 46.2 percent of Georgians enrolling at the state’s colleges and universities came from our 12-county Metro Atlanta region; by 2015, that number was up to 53.4 percent.  All four other regions saw their share of college freshmen decline at least slightly, with our 56-county South Georgia region taking the biggest hit; it was down from 14.1 percent of college freshmen in 2006 to 10.6 percent in 2015.

I mentioned above that the state’s convict population falls into two categories – those who are placed on probation (presumably for lesser crimes and/or plea deals) and those who actually go to prison.  Because that overall convict population is larger than the number of college freshmen we produce each year, it follows that most individual counties would fit that profile, and that is indeed the case.  Of Georgia’s 159 counties, 141 produced more criminals than college freshmen in 2015.

Of those, 22 actually sent more people to prison than to college.  That list of counties earning that dubious distinction is as follows:

 

Region County 2015 College Freshmen 2015 Prison Admits
Middle Baldwin 83 85
South Ben Hill 51 94
North Chattooga 47 118
South Clay 5 9
North Elbert 45 59
North Floyd 334 420
North Franklin 40 61
North Greene 40 46
North Hart 44 70
Middle Jones 69 82
South Lanier 5 16
North Madison 59 63
Middle Meriwether 65 72
Middle Richmond 531 558
Middle Spalding 185 212
North Stephens 50 71
North Taliaferro 3 6
North Towns 16 18
Middle Treutlen 26 27
Middle Troup 206 267
Middle Twiggs 19 20
North Walker 134 173

At the other end of the spectrum, 16 counties produced more college freshmen than total convicts (prison admits and probationers combined).  Here’s that honor roll:

Region County 2015 College Freshmen 2015 Criminal Convicts (Prison Admits & Probationers)
Coastal Bryan 239 96
Coastal Camden 241 188
Atlanta Cherokee 1,117 920
Middle Columbia 764 588
Coastal Effingham 306 229
Atlanta Fayette 784 471
Atlanta Forsyth 1,268 548
Middle Glascock 12 8
Atlanta Gwinnett 5,664 3679
Atlanta Henry 1,362 935
South Lee 216 111
North Oconee 305 65
Atlanta Paulding 587 346
Middle Pike 106 20
South Schley 38 25
South Turner 45 40

Probably the strongest performer in this category is fast-growing Forsyth County, which also posts some of the state’s strongest economic, educational and public health numbers.  Even a decade ago, in 2006, Forsyth County was already sending more people to college than into the criminal justice system, and it’s widened the gap considerably in the 10 years since then, as this chart shows.

Forsyth County Chart

In 2006, Forsyth sent 150 more people to college than into the criminal justice system; by 2015, it was sending more than two people to college for each one it convicted of a crime.

Just about the entire Metro Atlanta region performed well in this area, however.  Of the 12 counties in our Metro Atlanta region, all but one saw its ratio of college freshmen-to-convicts improve over the 10-year period.  The exception was Fayette County.  It still finished on the honor roll (above) of counties sending more people to college than into the criminal justice system, but nonetheless finished the 10-year period with slightly poorer numbers.

Copyright (c) 2016 Trouble in God’s Country

 

 

 

Georgia blacks make strong gains in premature death rates; rural white females losing ground

As we’ve noted in various previous posts, Georgia’s premature death rate (known formally as Years of Potential Life Lost before age 75, or YPLL 75) has been improving fairly steadily over the 20 years that the state’s Department of Public Health (DPH) has been compiling pertinent data.[1]  Between 1994 and 2013, the state’s YPLL 75 rate improved from 9,195.6 to 7,104.7, a gain of 19.4 percent.  The national median, as reported the Robert W. Johnson Foundation in its latest County Health Rankings, was 7,681, so Georgia is doing a little better than the nation as a whole.

But, as we’ve noted in past posts, Georgia’s improvement has been far from even; we’ve focused in particular on regional differences and the dramatic gap in YPLL 75 performance between Metro Atlanta and the rest of the state.  Until now, however, we haven’t looked at racial or gender comparisons, and that produces a couple of interesting headlines.  One is that the vast majority of gains in premature death rates between 1994 and 2013 have been made in the black population.  The other is that rural white females are losing ground.  Read more