Ep.3: Tort Authority & HOPE w/guest Rep. Stacey Evans

The Georgia Governor seems to want to challenge the separation of powers in the state government with his push for tort reform. Rep. Stacey Evans has had a front-row seat to the process and is also an ardent supporter of the HOPE Scholarship. Would you be surprised to know that Georgia has an abundance of HOPE? 

summary

In this episode of Georgia House Rules, State Representatives Karen Lupton and Stacey Evans discuss the challenges faced in the Georgia legislature, focusing on tort reform legislation and the implications for insurance companies and consumers. They also delve into the funding and future of the Hope Scholarship, highlighting the significant reserves available and the need for better allocation of these funds to support education. The conversation emphasizes the importance of collaboration in the legislative process and the need for transparency and accountability in government.

takeaways

• The legislative process can feel like an abusive relationship for those in the minority.
• Tort reform legislation is a major focus this session, with significant implications for consumers.
• Insurance companies are often protected at the expense of everyday Georgians.
• The Hope Scholarship has a large reserve that could be better utilized for education.
• Legislators need to work collaboratively to create effective laws.
• The governor's influence on legislation can undermine the legislative process.
• There is a need for transparency regarding insurance company profits and rate increases.
• Reserve funds in state government should be appropriated for public needs.
• The lottery was created to fund education, and that promise should be honored.
• Legislators must advocate for their constituents and not just follow the governor's directives.

Thank you for listening!

Transcript

Karen Lupton (00:01)
Hello, and I am State Representative Karen Lupton here on Georgia House Rules, and I'm thrilled to have with me a well-known, hardworking, excellently smart rep, who I'm proud to say is my colleague, Representative Stacey Evans. Thank you for coming and joining us.

Stacey Evans (00:20)
Well,

thank you so much and thanks for the super kind words. The pleasure is mine to serve with you. I'm so glad that you're here. was, you we had a pretty rough week last week and I know we're going to talk about some of those things, but I was as I was laying on my couch last Thursday night, just mentally and physically exhausted. thought this is really hard work, but I'm so glad that there are so many wonderful, awesome women that I'm doing it alongside and you were an image that popped into my mind. So just

Truly thank you for staying in the fight with us because it's just rough out there.

Karen Lupton (00:57)
Thank you so much and yes it is and I'm glad that we're here to kind of bolster each other up when we need it. It is, I remember during the special session in 20, was that 24 or 23? I can't even remember anymore.

Stacey Evans (01:18)
The last redistricting special. Yeah. 2020. 2021. Right. Twenty one. Okay.

Karen Lupton (01:19)
Yeah.

I wasn't here in 21,

but it was a near Christmas special session for the redistricting. And I remember I came upon you and I said, this is like an abusive relationship. This is like being in abusive relationship. Yes, 23, okay. Yeah, yeah.

Stacey Evans (01:38)
Oh, right, 23. Yes, right after the 22 election, I guess. So 23.

But yeah, you're right. It is like an abusive relationship in lot of ways.

Karen Lupton (01:48)
Yeah, just

you have to be very ready to, you have to have a very deep sense of resilience and well of hope to do this job as a person in the minority. I asked El Madi Holly the other day, one of our fellow reps who just seems to be perpetually okay. I mean, he's definitely, he can be fiery, but he is not downtrodden. And I said, how?

Do you keep that smile on your face? And he said, my metrics are not in here, man. My metrics are not in here. I don't measure my life by what goes on in this chamber, which is a great way to do it. And you had someone special had a birthday in your life this weekend, right?

Stacey Evans (02:24)
Mm-hmm.

I did my son Jack turned six yesterday, so that was super exciting. We had a birthday party for him and my daughter turned 13 on February 29th, even though February 29th didn't happen this year. February 28th. He's a leap year baby, but because of her school spring break we actually had her birthday party on Saturday. So we had birthday party Saturday, birthday and birthday party Saturday, Sunday, so it was a full weekend at the Evans house. Yes.

Karen Lupton (02:55)
Okay.

Yes, it sounds like it. On top of the very full week that we had in the legislature. What was, I mean, I know what I went through in the week. You have a different set of committees than I do. What was the week like for you?

Stacey Evans (03:19)
Well, the biggest thing on on my agenda like it or not. This session has been the tort reform legislation, Senate Bill 68. I was put on that special subcommittee of rules that's dealing with the bill, so that took over has taken over everything in this week. We had this last week we had two hearings. Plus it's just it takes every day. Whether we have a meeting or not, it is just a huge topic of conversation. I think there were at least

two, if not three press conferences that I ended up being a part of because of the legislation and then just lots of conversations about tort reform. So that was my week. And then of course, the last day that we were in this last week, they rushed up Senate Bill 144, which was another immunity bill specifically for pesticide companies, but really it was about Roundup and Bayer and Monsanto. So that was a nice surprise to cap off the week of, I sort of feel like

the legislature this year is like Oprah, you get immunity and you get immunity and you get immunity. I everybody who else wants immunity? We're just giving it out like candy. you know, the people of Georgia be damned if they get hurt because we're just, we seem to be in the business of protecting bad actors, big insurance, big corporations. And it's frustrating. And it's frustrating. It's frustrating for a lot of reasons, but it's, but I will say it's, I don't have any problem with business. I don't have any problem with people making money.

But if you hurt somebody, you take responsibility. It goes back to like everything I needed to know I learned in kindergarten. If you do something wrong, you say, I'm sorry. And when business or someone hurts another person, the I'm sorry is to compensate them for their damages. And it shouldn't be controversial. We shouldn't, we shouldn't just say we're not going to have any liability for people that do wrong out there. should say we're going to have fair liability. And you know, our system could always be better.

Karen Lupton (04:56)
Right.

Stacey Evans (05:18)
Making sure that we hold that balance but Senate bill sixty eight and some of the other bills that have been floating around the session are not about balance they're not about fairness there about protection. For the big and powerful who have lobbyist that Kemp out of the session all day every day and you know the people of Georgia the average consumer the average person they don't they're not at the capital. There is not. Right.

Karen Lupton (05:38)
No, no, they don't have that voice. We

have to stand in to be a shield for them and to let people know what this will mean to everyday Georgians in their life. People somehow seem to think that this will guarantee that the kind of reform we're talking about will guarantee lower insurance premiums. But as we've seen in Florida with their attempt at tort reform and now

the revelations that, oops, the insurance companies were actually making money hand over fist and hiding it from the legislature. You know, how can we trust insurance companies at this point when Florida just went through this?

Stacey Evans (06:23)
Exactly. And I think the Republican leadership in Florida is trying to tell us that right now. Like, Hey, we got duped. Don't let this happen to you. Maybe you want to slow down. And if we were in the business of responsible government and making sure we were doing it right, it shouldn't be hard to say, okay, let's take a pause. It's not an indictment on the governor or Republican leadership in Georgia. It's just when you

when you get new facts, you adjust to them. And now we have new information that tells us, hey, maybe the insurance companies are not doing as bad as they claim. in the subcommittee, we've been asking this question over and over again without answers. You know, when we talk about, I think it was 2023 is the last year we have numbers for insurance profits and it was like 90 billion. And every time we bring that up, say, oh, that was 90 million. That was a

Karen Lupton (06:50)
Mmm.

Stacey Evans (07:15)
That was a statewide. I mean, that was a nationwide number. Like that's not, that's not real. no, it was 90 billion. Anyway, it's a really big number, a big, massive profit number. And every time we say that they say, no, that's a nationwide number. That's not Georgia and Georgia. We're losing money. And I say, okay, well, where's that data? Crickets. We still don't have it. And so we already are in an information vacuum. We have this information coming out of Florida. So pause. And then on top of that.

Karen Lupton (07:25)
It's a massive number.

Stacey Evans (07:45)
Every time you ask someone if Senate Bill 68, the tort reform bill, every time you ask someone if it will reduce rates, we can guarantee that rates will come down, the answer is no. Unequivocally no. Maybe, best case scenario, it will stabilize rates. But it doesn't. I mean, if that's the problem, if out of control rates because insurance companies are losing money is the problem, not only do we have reason to doubt that's actually the scenario,

Karen Lupton (07:56)
Mm-hmm.

Yeah.

Stacey Evans (08:15)
that insurance companies are losing money. But we also know that Senate Bill 68 is not going to address that. And, you know, I'm not an insurance person. I don't mean I have insurance. I'm a consumer. But other than that, I'm not an expert, but I have really been trying to dig into this and I'm still waiting on answers. But one thing I know that I didn't know before is that Georgia is a state where if an insurance company wants to raise rates, they just do it. They raise rates and they file it on some system with the insurance commissioner.

Karen Lupton (08:25)
Right? Don't we all? Yeah.

Stacey Evans (08:44)
and the insurance commissioner technically can review those increases and say something about it after the fact. But unless someone looks at it, unless someone questions it, unless someone tries to roll it back, it's just done. And so I'm trying to find out more answers about how often are these rate increases that are filed, how often are they looked at, is every one of them questioned? Because it kind of seems like they should be, or at least if it's a

If it's a certain percentage higher than it was the year before, it seems like that would at least warrant some questions. Are those questions being asked? Are there regulations or laws that we can pass to make sure that we're doing consumer protections to make sure that insurance is fair? But since Senate Bill 68 doesn't do any of that, nothing.

Karen Lupton (09:29)
No, and from what I've heard, and again, we hear lots of things. From what I've heard, this is the governor's bill. This is his package that he's put together. It's a big bill and he is telling his rank and file, this will not be changed. You don't amend this. Oops, and the lights just went off in my office because I'm sitting still. Hold on. There we go. 

Stacey Evans (09:56)
Energy efficiency, I love it, I love it.

Karen Lupton (09:57)
So what I've been told, and we hear a lot of different things is that governor Kemp has put together this bill package and unlike many different types of legislation, he's told his rank and file that this will not be changed. Don't amend this pass it as is word for word. So even if there are parts that

different companies, medical malpractice and all these different people want to come in and negotiate things that we might find agreement on. This SB 68 is take it or leave it. we're saying, I mean, a lot of us are saying, well, fine, we'll leave it. don't need this. What I found

Stacey Evans (10:48)
Yeah, that's another.

yeah, that's just that's just another issue with this legislation. The way it's been handled is no one is going to argue that the civil justice system is perfect. Not me, not anyone, because nothing is perfect. We can always do better. But just ram.

Karen Lupton (10:53)
Go ahead.

Stacey Evans (11:09)
rotting, is that the word? Just ram rotting a piece of legislation through the legislature is not the answer. It's very heavy handed. It's also very disrespectful of the separation of powers. Last I checked, Georgia didn't have a king. Georgia had a governor, which is the executive branch, and it had a legislature, which is the legislative branch. And then of course, there's the courts. But we have a role here. we didn't ever amend anything, you would need us. If we didn't get to have our input on legislation, you wouldn't need us.

Karen Lupton (11:19)
Mm-hmm.

right.

Stacey Evans (11:38)
It's very insulting to say that, to say no changes. It's also very, I mean, I'll say this, I think it's unlike Kemp, generally, the way he's governed to just say, my way or the highway, and I don't want the legislature to do their job. haven't, I'm not saying he's never done anything that I didn't like, but that has not typically been how he governed, which I appreciate. And he was in the legislature. I he served in the state Senate for years. So it does seem like he should have some appreciation for what we do.

Karen Lupton (11:43)
Mm-hmm.

Yes, okay.

Stacey Evans (12:08)
So just saying no changes is very disrespectful and undermines our job and the voters who sent us there. The other thing odd about how this bill was handled is, you know, it started in the Senate and they put it in the Senate Judiciary Committee as they should. It's a very judiciary, lawyerly bill, and that's where those kind of bills go. And then when it came over to the House, it was supposed to go to, should have gone to, everyone thought it would go to, the House Judiciary Committee, because that's where these bills go. But as you know, and

Karen Lupton (12:25)
You

Stacey Evans (12:38)
Others on the call may know, but others may not. This bill got assigned to rules. The rules committee. Rules is not, yeah, rules is not a substantive committee where we debate bills and edit and take testimony and all that. Rules is a gatekeeping committee where you just the last stop before you go to the floor. So that was odd. And then of course, the rules chairman at least created this subcommittee.

Karen Lupton (12:45)
which is very rare.

Stacey Evans (13:05)
of I think there's 11 of us on the subcommittee that are doing the sort of charged with doing the vetting part of the bill. And so far we've had, we've had four hearings. One was the bill sponsor or the person who's carrying the bill. It's the governor's bill, but Senator John Kennedy, Senator Pro Tem Kennedy is carrying the bill. And so he came and spoke for a couple of hours and we questioned him. And then we had three hearings where we heard from people pro and con to the bill.

And then I expect we'll have one more meeting at least where we'll probably hear from Kennedy again, get a chance to ask him questions, or at least that's what has been forecasted that we would have that opportunity. and then technically we should then deliberate among the committee members, consider amendments and then eventually, pass or not pass the bill out. But that part hasn't happened yet, but yeah, the whole strategy has been strange. And here's the thing that's so weird too. Karen is that you have defense lawyers.

the George Association of Defense Lawyers, not as an organization, but some prominent members of that organization. And at least one sending a letter saying, yeah, this, this bill needs work. You know, we don't think it's great either. And then of course you've got trial lawyers saying that you've got victims saying that. And some of the things that these groups are proposing to change are really shouldn't be controversial. And I, I really wonder in his heart of hearts, if the governor actually has a problem substantively with the amendments.

Karen Lupton (14:28)
Hmm

Stacey Evans (14:31)
And it feels like him saying no amendments is really more about like respect my authority, you know, and don't step on my bill, not to go. Yes. Yes, of course. What kind of conversation would it be without South Park? So it's strange because there are, if we, if the committee, not, not just Democrats, not just GTLA, certainly not just me, but if the committee could have the pen, so to speak, to, write and edit and draw, which is.

Karen Lupton (14:37)
Ha

It was only a matter of time until South Park came up in this conversation.

without South Park.

Stacey Evans (15:00)
That's our job. I think we could come up with a good, fair bill, but we're just not being given that opportunity. And it's frustrating from the governor's standpoint. And as much as I love several of the Republican leaders that are both a part of this committee and our speaker who I have great respect for, I'm also very, I will just say though, I'm very disappointed that they are letting the governor bully us like this because someone has got to stand up for the house.

Karen Lupton (15:25)
Hmm.

Yes.

Stacey Evans (15:30)
It's got to be the speaker. It's got to be the Republican leadership and maybe they're doing it behind closed doors. Maybe that's why we haven't seen a bill yet. But I think that's what needs to happen. We all just need to stand in our place and it's not arrogance or that we think we're perfect. It's just that the governor's not perfect either and we have a role to play here. We just do. mean, don't play a football game with one team. Both people get to play.

Karen Lupton (15:55)
right or just have

one person running around the field with a ball.

Stacey Evans (15:59)
Yes.

And you don't, you know, think about this. You don't even just have one referee. You know, baseball game has one umpire. mean, you, you, everyone works on it to get it right. And that part is just greatly missing here. And it's, it's, I'm the word of the day is frustration. I'm just so frustrated and, I'm kind of tired of, kind of sick and tired of being sick and tired. I'm sick and tired of being frustrated.

Karen Lupton (16:03)
Yes, true.

You

Amen. Amen. What was fascinating, and this is kind of some inside baseball, a lot of folks who weren't in the legislature don't understand that in the house there are 180 people, 180 desks, and every day there are all sorts of flyers and announcements and sometimes little goodies, coffee mugs or cookies from various groups.

Stacey Evans (16:26)
Yes.

Karen Lupton (16:52)
who just want to get a legislator's attention. Now, each one of those papers or articles needs to have the business card of the representative who has bearing responsibility for that message, who is bearing responsibility for that message. And this past week on our desks arrived a photocopy of an article about the Florida tort reform kind of scandal, not

one copy of it, but two copies by two different Republican representatives putting this big, hey, reform didn't work in Florida. And I'm putting my name on this as a Republican rep. Two reps, Republican reps put this the same day on our desk. And I, I, I spoke to one of them and just kind of said, this looks like we're having a special session. That's what this looks like to me.

because the governor has indeed threatened a special session if we don't just say yes to what he's proposing.

Stacey Evans (17:58)
Yeah, which is another I've never in my life heard, not just governor. I'm not saying it's never happened. I haven't seen everything, but I have never known governor Kemp. have never known any governor to say pass this or I'm bringing you back. I mean, that is just a Gambia on the Pell. And especially when, okay, we'd like to pass something. I think a lot of people would like to pass something, but we've got to work on it together. It's not pass this or come back for a special session. it should be.

Let's work on something. And if you don't work in good faith, maybe I'll bring you back, but we're just not being given that chance. and yeah, for those that listening that don't know, mean, Florida passed tort reform, several years ago, or in the last year or so, I guess, because the insurance company was saying similar things to what they're saying here. We're, losing money and so we're having to increase rates and it's such a catastrophe and only stopping lawsuits can fix this. And so they did. And then they found out, you know, recently that,

They weren't actually losing money, that they were just transferring it to subsidiaries so that they couldn't see it. And so that's what we're talking about earlier and talking about now is, so let's pause a second. Let's figure it out. Let's figure out if we're being lied to as well. the fact that we don't even want to know the answer is just, it's odd and it's irresponsible to me. is the, justice has gone on and businesses have survived.

Karen Lupton (19:08)
Yes.

Yes, I agree.

Stacey Evans (19:21)
Not only have businesses survived, we've been the number one state in which to do business for what, like 11 years in a row? So clearly it's not this fire alarm disaster of an emergency that we can't find out if there is even an emergency. Let's find out.

Karen Lupton (19:28)
RIght.

Correct.

I've told my, in talking about this, I've said, it's very disingenuous in my opinion to run around saying that we're the number one state to do business constantly, like on a loop for six years and then turn around on a dime and say, my God, we're the worst place. We're absolutely driving businesses out of Georgia because of the high cost of insurance. Like what happened to number one state to do business?

six weeks ago. Like what what happened to that? So it's

Stacey Evans (20:05)
Right. Right.

Well, you know,

I've asked someone about that and what I was initially told it was it was in a caucus meeting I think we had with some of the insurance folks and they said, well, site selection magazine is the one that's named us number one place to do business for 11 years running. And the person in the caucus meeting said from the insurance agency said, well, that they don't they don't look at litigation environment. And I was

sitting there in the meeting thinking, well, that's odd. mean, because that's part of it. mean, everything is part of business regulation, all that stuff. So I went and pulled up some old site selection magazine articles to find out the criteria. Yeah, litigation, environment, footprint, whatever. It's a criteria. It's in the top 10 of things that they look at. And so I thought, well, first of all, that's just wrong. And then what people are pointing to a lot too that some may have heard is this

Karen Lupton (21:00)
my goodness.

Stacey Evans (21:07)
Georgia is a judicial hellhole. There's some listing of judicial hellholes and we've been on that list. think right now we're on there at four. But the reality of that list is that it's a list put out by interest groups that are pushing for tort reform on behalf of businesses across the country. So it's not a neutral sort of award or designation or whatever. It's a lobbying effort. Yeah, it's a lobbying effort.

Karen Lupton (21:10)
lord.

Yes, yes, yes, it's somewhat subjective.

Stacey Evans (21:36)
And you also, if you look at why we're on the list, it says, you know, nuclear verdicts and it lists some higher verdicts that have happened in the last few years. That's very specific, very anecdotal. And then if you look at what is the reality, have there been some large verdicts? Yes. I would assume a jury of 12, if they got to that verdict unanimously, that's generally speaking, it's right.

And it's probably deserved just because it's high doesn't mean it's wrong. Damages can be very high. Some of the high awards too are in products liability cases. And for those that don't know, when you have a big verdict in a product's case, it's usually because it's a punitive damages award. And I know some of these higher verdicts that people like to point to are big punitive damages awards. And those are not to compensate the victim. Those are to punish and to deter the bad conduct that led to the verdict. And so the state of Georgia gets the vast majority of that.

damages money from the defendant. doesn't go to the plaintiff or the it goes to the state. And so when you see that big, I think it was General Motors or Ford or someone had a punitive damages award against them. And I think it's still on appeal anyway. But if and when it ever gets paid, the state of Georgia gets that it's not, you know, greedy plaintiffs, as people want to call them. So these

Karen Lupton (22:56)
walking away with $50 million.

Stacey Evans (22:58)
Yeah, exactly.

so, and so we're just still, you know, coming back to where you started, I went, I just went like this around your question, but, yes, there's no emergency. We're allegedly the best place in the state to do business. Anybody that says otherwise as part of a propaganda machine. mean, I'm not just saying that as a talking point. It's true. and let's find out the state of Florida.

The Republican leadership in the state of Florida said, we got duped. Maybe y'all want to find out if you're getting duped too. And we're just like, nah, we're good. We don't need to know. It doesn't make any sense. Yeah, that's fine. I don't get it. I don't get it.

Karen Lupton (23:35)
We'll take our chances.

Quite unbelievable. I would have loved to have been a fly on the wall when Kemp and his team got word of the Florida stuff going down. I would have loved to have a fly on the wall.

Stacey Evans (23:51)
absolutely. here's the other thing that's interesting. John King, the insurance commissioner, this is allegedly all about insurance rates and this emergency that we have. Not one time has he come to our subcommittee meeting to talk to us, to allow us to question him. Not once, not even been there, not only not signed up to talk, but not even been there.

Karen Lupton (24:06)
Kidding!

womp womp. Bad show, bad show, bad show.

Stacey Evans (24:15)
Yeah. Yeah, we need one of those

where where's Waldo where in the world is John King when insurance is being discussed.

Karen Lupton (24:24)
Okay. I am picturing John King right now in the striped shirt and the hat of Waldo that maybe we should, we should make AI put that, put something up like that. That would be hilarious. you obviously you're an attorney yourself. so you're very well versed in the law and the sort of legal wrangling those issues that we're talking about when we talk tort reform, but you are also a gigantic proponent of the hope scholarship.

Stacey Evans (24:28)
Thank

I am.

Karen Lupton (24:53)
in Georgia. And as you pointed out in the General Assembly, during a parliamentary inquiry on the budget, I believe, you pointed out that the bucket of money that pays for the HOPE Scholarship is now sitting with a very large reserve. And I'd love for you to explain that and what changes you think should happen with HOPE.

to put that money to the best use for our students.

Stacey Evans (25:25)
Absolutely my favorite thing to talk about. I could talk about it forever. So the hope just quick primer. So we got hope scholarship goes to students who attend four year colleges and universities. Generally speaking we've got hope grant which is a it was always supposed to be a workforce development tool to try to get folks trained and into the workforce. So it goes to students who attend our technical colleges. So it could be a six month nine month certificate program a two year degree program there. But.

Karen Lupton (25:29)
Yay!

Stacey Evans (25:53)
That's what the grant does and they're different. That's why they're called different things. The Hope Scholarship right now has two parts. Zell Miller Scholarship is the technically the only full tuition scholarship by law. So you have to have a three, seven combined math, verbal, SAT score. I mean, at 3.7 GPA and a 1200 combined math, verbal, SAT score to qualify for that. And then if you have a 3.0, you qualify for regular hope, which is under law by statute, a percentage of tuition.

depending on fluctuating lottery revenues. And then the grant has also a Zell Miller grant component. if you have a three, five, you get full tuition at technical colleges. If you have a 2.0, adequate yearly progress, then you can qualify for regular HIP grant, again, by statute fluctuates depending on lottery revenues. So when I say fluctuates by lottery revenues,

The way we rewrote the law in 2011, which is what created all these different pots, which we used to have fewer pots. But anyway, now we have all this 2011. The where did my mind go? Where did my mind go? Where did my mind go?

Karen Lupton (27:04)
I totally understand.

Stacey Evans (27:07)
It went somewhere. anyway, so we have these little, so the fluctuating lottery revenues part. So the way we change the law, lets the governor set a factor rate to determine what that percentage of tuition will be. For the last, including this budget, which is why I made that parliamentary inquiry you alluded to, that and then the last, at least the last two years before this, think we have, the governor has set the factor rate at 100%.

So that, so even though the statute still says you only get full tuition if you're a Zell Miller scholar or a Zell Miller grant recipient, because the factor rate's been set at 100, anyone who's qualified for HOPE at all, whether it's Zell Miller or otherwise, has gotten full tuition. And that's great. We still need to change the statute to say that so that we can, it can be for sure and not just on the whim of a governor.

Karen Lupton (27:51)
Yes.

of a governor,

okay.

Stacey Evans (27:59)
Yeah, because that's who sets the factor rate. No one else does. The legislature doesn't. The governor does. And the reason that I feel confident in saying that we could change the statute to say that everyone gets full tuition again is because the lottery is so incredibly healthy. The reserve requirements, which were also changed in 2011, were changed in a way that we just have a lot of money sitting on the sidelines. So get really wonky for a second.

By law, we are required to 50 % of the prior year payouts for HOPE grant scholarships and pre-K. That's all lottery money can go to, HOPE and pre-K. So whatever we spent on HOPE and pre-K, 50 % of that three-year average, that's what you're required to hold. I hope that makes sense. three-year average of 50 % of the payouts to HOPE and pre-K, that's what the reserve requirement is. So you put all that into a calculator.

Karen Lupton (28:49)
Yes.

Stacey Evans (28:57)
And it gives you right now, it's a little over $700 million. That's what we have to hold in reserves and reserves are healthy. mean, you know, any, have savings at home, our business would have investments or reserve funds. That's, that's good. That's not a bad thing. But so we're required to hold 700 million. That's a very healthy reserve prior to 2011. We only required 10%. And the constitution only requires 10%. So, so we're, which, which, but I'm fine with the 50%. That's fine.

Karen Lupton (29:02)
Okay.

Yes.

wow.

Stacey Evans (29:24)
but drumroll, so we're required to hold a little over 700 million. Right now we are holding 2.4 billion with a B. That means we're holding $1.6 billion more than we have to.

Karen Lupton (29:35)
my gosh.

Stacey Evans (29:41)
It's a ton of money. It's a ton. I don't know. I'm so back to the word of the day, frustration, but I've been frustrated about this for years. So I've been trying to, so the, the reserves started piling up, let's say 2012, we noticed an extra 60 million going in, then an extra 60 to 70 to 80 million going in every year since then, it just piles and piles and piles. And so this started in the deal administration and, I was here for some of that. And I, was asking.

Karen Lupton (29:41)
Why? Why?

Stacey Evans (30:10)
A lot of questions where, can't we use this money? Where, where is it going? And, I kept. No one would, no one really ever gave me an answer. And so I kept thinking, maybe governor deal has a plan for it and he wants to do something with it on his way out because it's a lot of money. could either, you know, I always thought you could run. You don't want to, you don't want to do year after year promises based on reserve funds because theoretically they will at some point run out.

But this money is so much that even the interest earned on the money just sitting around right now, all the lottery money, it's about 160 million bucks just from the interest. So you can spend for a while. mean, fully funding the difference between the percentage that we used to do for hope of say like four years ago, I think it was, you know, it be somewhere between 85 and 95, 90 % depending on which school you're at. mean, doing it all the way.

Karen Lupton (30:46)
BOOM!

Stacey Evans (31:05)
in round numbers, probably like 40 to 50 million bucks. So I mean, you could do that every year indefinitely and not even get to the interest. So anyway, it's healthy enough to do that. But I always thought you could, you might not want to make year over year promises, but you could run some really innovative pilot programs and find out what works, you know, and then commit general fund dollars or something else. You could also, I always thought it would make a lot of sense to put a big

part of it, you know, maybe like a billion dollars, we'd still have 600 million more than we're supposed to have. You put a billion dollars in a, like a unit, like how universities do their scholarship endowment funds, you would throw off a great percentage every year higher than what we're getting right now, because we're not, we're not investing the money in anything like that. It's just, I don't want to say simple interest, it might be a little bit more than that, but maybe like a money market percentage, but not like what you could get. Yeah.

Karen Lupton (31:39)
Right.

Ugh.

Right, it's basically in kind

of a savings account or something, nothing fancy.

Stacey Evans (32:03)
Yeah.

So it seems like we could do that. Something like that. And it just hasn't happened. So last year, you'll recall we did, I was able to get some language added to a bill that was moving that was in that same section related to the coin operated amusement machines. So we added language that says when the, when the reserve is, is higher than it has to be, which it has been for awhile, you, you spend, we have to spend.

no choice but to spend 10 % of the three-year average of the extra reserve. So 10 % of the 1.6 billion that's extra. So we did that this year, like to the pinning, which was like, okay, maybe just throw another 50 million on there because you could, know, hope is good right now. As I said, that's fully funded for everyone, but pre-K needs help. I mean, we've got kids on waiting lists, even for four-year-old pre-K, we have not made a dent in three-year-old pre-K.

We know we've got facilities that need retrofitting for our littlest babies. There's just a lot that could be done with that money. And I always go back to this in the nineties when hope was created, when the lottery was created, Georgians did not create a lottery for the sake of having a lottery. They created a lottery to fund education. And so I don't think we're keeping our promise by throwing this money in a pot and just looking at it. The Georgians wanted us to invest in education. So, and we've got need and I don't know who's against pre-K it's the

Karen Lupton (33:24)
Yes, that's a very good point.

Stacey Evans (33:30)
you know, best dollar we can spend. think for every dollar we spend on pre-K, we save six to seven in remediation in K through 12. So I don't, I don't get it. I have no answers on why I will. I was kind of, I'm half joking with someone the other day. said, I'm going to figure this out. I, and I am a big part of the reason that I keep running for reelection is because I'm, I'm, staying on this. I mean, it's just, it's a lot of money.

Karen Lupton (33:36)
Wow.

Yes.

Stacey Evans (33:58)
that could be put to great use that is not in it. It's just hard to watch. I've also, you know, a lot of legislative leaders will tell you, well, this is up to the governor. You know, the governor is the one who sets the revenue estimate. And I will tell you, another little lawyer nerdy moment. I don't think that's true. Reserve funds don't need estimating. They don't need, they're there. I think that the legislature could appropriate those reserve funds whenever it wants.

Karen Lupton (34:09)
right.

okay.

Stacey Evans (34:27)
Now, does the governor still have to sign the budget? Of course. but we have a right to take those, those dollars and put them to use too, because they're not estimated. They don't have to be estimated. They're there. We know they're there.

Karen Lupton (34:42)
That is fascinating. Have you crafted or started to think about any legislation? I mean, I'm assuming it would need to be a constitutional amendment.

Stacey Evans (34:50)
Well, it would just need, it's just there. I mean, we just need to go and we just need to appropriate it. And I've talked to those who, know, Karen is wonderful as the two of us are. We probably would not be able to just go grab those dollars and put them in the budget. But there are people that do. I, know, without naming names, I think there are folks that agree with me. It's just whether that would definitely open up it's unprecedented.

Karen Lupton (35:05)
No, we're not allowed in those discussions.

Stacey Evans (35:16)
legislature has never done anything like that to my knowledge. And so it would probably spark off a little bit of a, I don't want to use the word war, but I guess sort of between the legislative branch and the executive branch. But the money's there. Georgians put it there to be used for educational purposes. So I don't know why. Other than, I mean, we want to do this cooperatively, but if the governor's not going to cooperate with us, it seems like we should. But here's a greater, it sort of spurs this other line of thinking to another rabbit hole for us to go down.

What else is out there? mean, I know about these reserve funds because I just asked so many questions about hope and lottery and I just dug in. bet you there are, not I bet you, I know there are funds sitting in these reserve pots all throughout state government that I bet we're unaware of. And that's just a waste because our state has needs, our citizens have needs. if we have funds that could be put to use to address those needs, it seems wrong to me that we're not doing it.

Karen Lupton (35:54)
Okay.

Stacey Evans (36:16)
But, but to answer your question, I don't think we need more legislation to take the, appropriate the reserve funds. think we just need to put them, we just like when we're doing, you know, the governor sends us his budget. I think we just need to, when we do our version, which hilarious, only hilarious to inside baseball people, but the budget this year is house bill 68, you know, the tort reform bill is Senate bill 68. So hot number this year. yeah.

Karen Lupton (36:17)
Yes.

Yeah.

my gosh, I hadn't put that together.

Stacey Evans (36:44)
But I think we could just put them in. I think when we're doing conference committee or if we had wanted to do it before we passed the budget on the House floor, I think we could have just put it in there and then sort of dared the governor to take it out, I guess.

Karen Lupton (36:56)
take it out, right? And justify why keeping the money out of service to the citizens is a good idea. That's something I don't understand at all.

Stacey Evans (37:07)
Exactly. Yeah. What are we saving it for? Yeah.

What are, what's it for? And if it's for, if there's a reason that we need it, then say it. I mean, it seems like to me, if we need more money and reserves, then the law should say that then the law should say your reserve fund should be, you know, I guess it's right now about, uh, more than double, two and a half times total spending every year. mean, I think even more than that. Yeah. My math's probably even off on that. I mean, it's just,

Karen Lupton (37:19)
The law should say that.

Right, what we have now.

Stacey Evans (37:37)
It's way high and in lottery. know that lottery can fluctuate in one year, maybe higher than the next, but it's not going away. People are not going to stop playing the lottery altogether. So the idea that you need, you know, two and a half times what you spent last year or more just sitting there. It's just not realistic.

Karen Lupton (37:46)
Mmm.

Yes,

when there are so many needs in our state and you're exactly right. I love the way that you put that, that people didn't vote for the lottery to have a lottery. They voted for a lottery to fund education for those who need it. So let's put those dollars to work. They're sitting there. I would say something very rude right now, but I'm going to about what I used to have a joke about what I thought.

Stacey Evans (37:59)
Yes.

Yeah.

Karen Lupton (38:24)
Kemp was doing with all the extra cash in the budget, but I won't say it now because it wouldn't be appropriate. So I'm going to hold my tongue.

Stacey Evans (38:32)
Well, you know,

well, on that note, though, you know, we've got the largest state general fund reserve that we've ever had in history. think maybe that any state's ever had in history. I think it's like what, like, fifteen billion dollars now. And they're the same. I think there's stronger support in the law for the legislature appropriating the lottery reserve funds on its own. But I actually think there is a very good argument.

Karen Lupton (38:44)
Yep. Yep.

Stacey Evans (39:00)
that the legislature could also appropriate rainy day funds on its own. Because again, it's not, we have a revenue estimate from the governor because we don't know what next year's sales tax revenue or all the revenues that we don't know what they're gonna be. Somebody's gotta estimate it. Yeah. But we know the reserves. No one has to guess until we don't need to be wedded by one person's estimate. We know it's right there. We could either grab it or not grab it.

Karen Lupton (39:15)
That has to be an educated guess, yeah.

Stacey Evans (39:28)
You know, it's a little bit harder just because of the way the laws are written. I think that we could, and it would be probably someone would have to challenge it in court, I guess, to find out the final, final answer. But it's there. Now, I'm not actually advocating that we pull a ton from the state reserves right now, not to go in another rabbit hole we could go down to is what's going to happen in Washington and what of the pass-through federal money that we get, are we still going to get? We could be in a

Karen Lupton (39:42)
Hmm.

Exactly.

Stacey Evans (39:58)
and a big pickle. But anyway, that's topic for another day. Yes.

Karen Lupton (40:00)
Yes, every yeah.

let me tell you and talk about a special session. Georgia has, we must have by law a balanced budget. So should something on the federal level fall all the way apart, even if we pass a budget out of this session, we may need to come back to fix the budget because federal funding gets pulled out from underneath us. interesting times.

Stacey Evans (40:29)
Yes, scary time. Yep, yep, yep.

Karen Lupton (40:29)
that we're living in.

Get those coffee mugs that say, know, tired of living in unprecedented times, ready for some precedented times. But, you know, like you said in the beginning, this is, this is hard, but we're here doing it together. We obviously have, I think most of us, mean, and even most people I think across the aisle are here for good reasons. We really do believe in public service and putting our talents to work.

for the betterment of the state and our constituents. So Stacey, I wanna thank you again for spending some time and sharing your expertise with us. It really means a lot. And I think it's really enlightening the way that you are able to describe things to people about both tort reform and our hope reserves and hopefully can give people some, bigger, broader understanding of what we're dealing with here. Cause sometimes it can be very hard to.

get into people's kind of living rooms, so to speak, with these things and make them understand how it affects their daily lives. So thank you so much for, hey, it's my pleasure. mean, talking with smart people, doing good work, this is the easy part of the job.

Stacey Evans (41:31)
Sure.

You're welcome. Thank you for having me. It's fun. Yeah.

Right. Fair. Fair. if only we could do

more of it, not, you know, to end where we started. That's what we should be doing in this subcommittee on tort reform. That's what we should be doing on all legislation is actually having productive conversations, give and take, writing, erasing, redrawing. That's how you get to the right place. And there's just not enough of that going on down at the Gold Dome right now.

Karen Lupton (41:55)
Hmm.

Amen. Well, let's get our pencils ready. Where's my pencils? I don't have any pencils. I just have pens.

Stacey Evans (42:14)
Yes.

Well, yeah, so you can write in pen and then cross out verbal. Yeah. Yeah. Either way, either way.

Karen Lupton (42:21)
And then, yeah, there you go, scratch through it. I mean, all they

had was quills and ink in the day. We can do it. Well, yeah, well, we'll be back at it. Stacey and I will be back at it tomorrow in the Gold Dome. We're recording this on a Monday. I'm not positive what day this will come out, but I don't even, it's the 17th. We're recording on the Monday, Monday, 17th. We'll see what this week brings, whether it's tort reform or not, and just keep doing the best we can with what we have. So.

Stacey Evans (42:26)
Exactly. Yeah, we can do it.

Karen Lupton (42:50)
Again, thank you, Stacey, and for those of you who are listening or watching, please join us again when we're sure to have great discussions on Georgia House Rules, and we'll see you next time.

Stacey Evans (42:51)
Thank you.

Bye, thank you.