By Dave Williams and Maria Saporta
As published in the Atlanta Business Chronicle on Jan. 4, 2019
When Nathan Deal took the oath of office as Georgia’s 82nd governor on a snowy day in January 2011, the Great Recession had swollen the Peach State’s unemployment rate to 10.4 percent.
The state government’s “rainy-day” fund, reserves to use in case of emergency, was down to a dangerously low $116 million.
As Deal prepares to vacate the Governor’s Mansion later this month, unemployment stands at 3.5 percent, so low economists consider the state’s economy essentially at full employment. The fiscally conservative Republican governor has built up the reserves to $2.5 billion, about as high as bond rating agencies figure the fund needs to go considering Georgia’s $26.2 billion annual budget.
Given the state of the economy eight years ago, it’s no surprise Deal made jobs the top priority of his administration, to the tune of nearly 800,000 new private-sector jobs generated in Georgia on his watch — even while the state missed out in the bidding for Amazon’s second headquarters.
In an exclusive interview with Atlanta Business Chronicle, Deal said promoting economic wellbeing should be a core mission for any governor.
“My personal philosophy has always been that everything that government does should ultimately lead to employability of our citizens, either initial employability or improvements in their job skills so they can get better jobs,” he said. “That was highlighted simply because of the economic situation we were in as a state.”
While economic development was Deal’s hallmark, his eight years as chief executive also were marked by investing in transportation, reforming the criminal justice system and stabilizing HOPE scholarships.
Criminal justice reform strikes closest to the governor’s heart. Just the night before the interview, Deal said he had hosted the annual dinner with former inmates who now work at the Governor’s Mansion and the Georgia Capitol – a dinner where the governor’s staff serves the meal to the former employees.
“Seeing these individuals and their expressions of appreciation for what criminal justice reform has done in practical terms for their lives, that’s the reward,” said Deal, who began to choke up with emotion. “I talk to the ones at the Mansion on a daily basis and keep up with their progress.”
Deal said it’s an exciting time whenever they are coming up for a possible work-release and moving forward with their lives.
“A lot of things we do in government are done in the abstract,” Deal said. “Statistics justify whether you were right or wrong. Criminal justice reform is different. It translates into the lives of individuals — whether it’s someone who has made a mistake and is possibly headed to prison but is diverted into an accountability court and given a second chance. If they’re successful in that second chance, they won’t go to prison. Those are the human stories. Those are the ones that make a lasting difference because they are generational in their effects.”
Deal said his strategy for economic recovery differed from that of many states. Rather than raising taxes to offset the loss of revenue brought on by the recession, he cut state spending while looking to grow the economy by creating jobs. That meant stepping up Georgia’s workforce development efforts, which he did by creating the High Demand Career Initiative.
The program offers free tuition to technical college for students who take courses in one of 17 job categories, primarily blue-collar trades that offer high pay. A recent survey found that 88.4 percent of the students who received a degree or work-ready certificate through the program found a job in the skill they trained for, while 99.2 percent got a job of some sort.
“It is the most successful program I have ever seen in terms of focusing on specific needs in the economy … and being able to meet those needs,” Deal said. “It has been a model for other states.”
Another education initiative the governor holds up as a success story is REACH, Georgia’s needs-based scholarship program. He said it differs from needs-based programs in other states in that students have to earn it.
“Those eighth graders selected to go into this program sign a contract … as do their parents or guardians,” he said. “It requires them to have a 2.5 grade-point-average or better. … They are required to stay out of trouble, and we have seen the number of disciplinary actions drop significantly.
“They are required to be prompt and constant in their school attendance. We have seen their school attendance escalate substantially. … The success of that is far greater than any other needs-based scholarship program I have ever heard of.”
Georgia made great strides in transportation during Deal’s second term in office, timely progress considering the state has gone from 10th in the nation in population to eighth since he became governor.
The Georgia Department of Transportation is bringing in about $1 billion more each year in tax revenue for roads, highways and bridges since the General Assembly passed the Transportation Funding Act of 2015. Much of that money is going toward a network of toll lanes crisscrossing metro Atlanta that is getting positive reviews from commuters.
“We’re seeing the results of that extra $1 billion … 11 major projects that are funded over the next 10 years primarily from that revenue,” Deal said. “As our population grows, we’re going to have to continue to respond to it.”
In the transit area, Deal hailed the legislature’s passage this year of a bill creating a regional transit agency for metro Atlanta, The ATL.
“The millennials do have a different point of view about transportation,” he said. “That’s been one of the lessons many members of the General Assembly have come to understand. Many of them do not want to drive a vehicle, be responsible for the insurance, figuring out where they’re going to park and how they’re going to drive to get to work. They prefer the convenience of mass transit and alternative ways of moving around.”
The governor didn’t come right out and endorse the upcoming referendum in March on whether to expand MARTA bus and rail service into Gwinnett County. But he said the discussion among policy makers in metro Atlanta is evolving in the direction of more transit.
“An inevitable conclusion that’s going to be reached at some point is there is a need, whether it’s in Gwinnett County or in Cobb County, to expand the availability of public transit,” he said.
Deal credited MARTA executives with doing a good job improving the system’s operation, including addressing the safety issue.
“The better MARTA works in its original confines, the better it can sell itself for expansion,” he said.
Deal’s efforts in economic development and transportation have drawn widespread praise from both Republicans and Democrats. But he didn’t accomplish his initiatives alone. Besides the support of the General Assembly, he also cultivated a partnership with Atlanta’s Democratic leaders.
“[Former] Mayor Kasim Reed and I had a great personal relationship,” Deal said. “We both recognized that we have different political party labels and, by virtue of that, there are certain differences in priorities. But we both had a commonality of interest in bettering the lives of our citizens and constituents, and that did focus around jobs.”
Deal said Reed, as a Democrat, had a connection with former President Barack Obama that helped Georgia land federal funds, notably for the deepening of Savannah Harbor, one of the state’s most important job-generating projects.
“That has continued with … Mayor [Keisha Lance Bottoms],” Deal said. “She has been very cooperative and helpful, and we’ve seen success in that regard. I think the secret of overcoming some of the divisiveness that occurs from party labels is to find a common area of concern that serves the constituents of both elected officials and focus on that. For us, it was job creation.”
But the Deal years also were marked with significant partisan pushback on several issues, some from Democrats and some from Republicans.
During his first year in office, the popular lottery-funded HOPE Scholarship program then-Gov. Zell Miller had created during the early 1990s was foundering. Lottery sales were failing to keep pace with growing enrollment in Georgia’s public colleges and universities.
“What we were confronted with was … no control over what that tuition was going to be,” Deal said. “Under that circumstance … if the outflow continues to escalate and you have no ability to slow it down, it’s going to lead to bankruptcy.
“We were told, it was going to be bankrupt in about three years or at least to the point that it could not fulfill its obligations to those HOPE scholars who had already enrolled and were living up to their part of the obligation.”
When Deal moved to preserve the program by cutting HOPE benefits, Democrats in the Georgia Senate complained. But he said he made the right decision given the program’s financial circumstances.
“The main change was a simple change, but it was a complex one in the minds of many people,” the governor said. “It was to disconnect the outflow and give control over it … [by] setting a specific percentage of current tuition [HOPE would cover] and then have the flexibility, depending on your revenue source, of increasing that percentage every year if the times were good. If the times were not good, you were not burdened with an outgo that you could not accommodate.”
As the economy has improved over time, Deal said the percentage of tuition HOPE covers has risen from 82 percent to 87 percent.
The most consistent complaint from Democrats over the years has come from the governor’s refusal to expand Medicaid eligibility under the Affordable Care Act. A study done by the Washington, D.C.-based Urban Institute done in 2014 showed Georgia would lose $33.7 billion in federal funds during the next decade by opting out of Medicaid expansion.
But Deal had philosophical concerns over what adding to the state’s Medicaid population would mean.
“I think you do a disservice when you expand government health care into an arena where in the past, people have gotten it through their employment,” he said. “As we increase employment, especially good employment … most people get their health insurance through their employer.”
From a practical standpoint, the governor said he saw the Affordable Care Act’s approach as overly top-down, leaving states without options.
“I’ve always felt if we could have the flexibility to design our Medicaid program as we thought best … with the same resources, we could have a much more deliverable product,” Deal said. “By doing that we would save money for the federal government and the state, and those savings could be used to expand our coverage.”
While Deal took heat from Democrats over HOPE and Medicaid, he was hit by religious conservatives in the Republican Party when he vetoed a religious liberty bill the General Assembly passed in 2016. Civil rights groups criticized the legislation as discriminatory against gays and lesbians, while business leaders were worried Georgia would face convention and tourism boycotts as well as a mass exodus by the rapidly growing film industry if the governor signed the bill.
Deal said there simply were no facts surrounding the issue in Georgia that would justify the legislation.
“In very simple, practical terms, there’s not been any good example given of any situation that has occurred that is adverse to those in the religious community in Georgia that would have been prevented had we had a religious liberty bill,” he said.
“To those who think we need a religious liberty act in Georgia, I would simply ask one question: ‘What criminal law of the state of Georgia do you wish to violate in the name of your religious beliefs?’ I’ve never gotten an answer to that question.”
At the same time, the governor suggested the controversy over the issue has been overblown by some in the film industry. Threats to pull out of Georgia resurfaced when Gov.-elect Brian Kemp endorsed a version of religious liberty legislation during this year’s campaign.
“When you’ve got some of the so-called stars popping off about it, it’s time for the leadership in the film industry themselves to step up and put a lid on it because those kinds of voices do harm to the industry if people listen to them,” Deal said. “If they’ve got a star who does not want to film in Georgia, I’m sure there’s a stack of people who would be willing to take their place.”
The growth of film and TV production in Georgia has been one of the Deal administration’s major achievements. During the last fiscal year, the industry generated a statewide economic impact of $9.5 billion, including $2.7 billion in direct spending, up from virtually nothing before the General Assembly began offering generous tax breaks to attract film companies in 2008.
“It’s been a great boon for our state,” Deal said. “If you’re going to give tax credits, you have to be able to show you have gotten substantial extra benefits above and over the credits. I believe we can show that has happened.”
With eight years as governor under his belt, Deal is in good position to offer advice to fellow Republican Kemp, who will take office Jan. 14. Deal did so by suggesting Kemp retain heads of key departments who want to remain on the job.
“What a governor needs to know is he’s got good people in positions of responsibility,” Deal said. “If he does not have qualified people in those positions of responsibility … it will make his job much more difficult. It will throw him exclusively into the political arena, and this is the worst arena in which to have these things decided.
“I feel very fortunate to have had good people. … I hope that if they want to stay, he will give them serious consideration.”
Deal said he doesn’t feel he’s leaving office with any major unfinished business.
“I think we have touched most of the major big issues our state needed to address,” he said. “The real challenge is sustaining those efforts, refining them, offering them as circumstances dictate and not abandoning them unless they are just not achieving their goal.”
The governor said what he will miss most when he’s no longer in public office is being able to impact people’s lives. But he said he’s happy with what he was able to accomplish while he was in a position to make a difference.
“We have a lot to be proud of. I am very pleased that I am leaving the state in as good a shape as it is,” he said. “That’s always a goal any elected official should have.”